(Corrects rise for Santander in 10th paragraph, to read rose 1.7 percent not rose 1.7 up 1 percent)
* FTSEurofirst 300 up 0.4 percent
* Telenor surges on deal with Russian partner
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By Brian Gorman
LONDON, Oct 5 (Reuters) - European shares rose in early trade on Monday, having hit a four-week closing low on Friday, as the euro zone's services sector returned to growth, and with miners and banks gaining on positive broker comment.
At 0831 GMT, the FTSEurofirst 300 index of leading European shares was up 0.4 percent at 967.00 points.
The index fell 1.9 percent on Friday, after U.S. jobless numbers were higher than forecast but is still up nearly 50 percent from the lifetime low on March 9.
"The tone of the market has been dominated by the (U.S.) employment report," said Bernard McAlinden, investment strategist at NCB Stockbrokers. "But the improvement in the labour market is still very much on trend. The market was overbought, and had had a diet of positive surprises."
Among miners, Anglo American, Antofagasta, BHP Billiton, Lonmin, Rio Tinto, Vedanta and Xstrata rose between 1.4 and 3.8 percent, as the price of copper and other metals picked up.
Eurasian Natural Resources Corp rose 2.4 percent after Nomura initiated coverage with a "buy" rating.
RBS upgraded its stance on Antofagasta, BHP Billiton, Rio Tinto and Vedanta Resources to "buy", while raising the target price for several stocks in the sector.
Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC-40 rose between 0.1 and 0.2 percent.
Banks were mostly higher. HSBC, Royal Bank of Scotland and UniCredit were up between 1 and 3.9 percent.
Spain's Banco Santander rose 1.7 percent after JPMorgan lifted its target price to 12.4 euros, giving 19 percent upside, from 11.9, retaining its "overweight" rating.
"Following newsflow on Brazilian IPO, we see first signs of profitability pickup for the group," said the broker in a note.
It said the company had a more expansive growth and revenue environment, offsetting compressing lending spreads and slowly declining risk premiums.
Another Spanish heavyweight, Telefonica, also benefited from a hike in target price. The shares rose 1 percent after Deutsche Bank upped its target to 19.9 euros, from 19.2.
Oil producers fell, as crude prices hovered just below $70 a barrel. Total, BP, Royal Dutch Shell and Repsol fell between 0.7 and 1.1 percent. Pharmaceuticals, relatively strong performers in recent weeks, were lower. GlaxoSmithKline, AstraZeneca and Sanofi-Aventis fell between 0.5 and 0.6 percent.
TELENOR SOARS
Norway's Telenor surged 11.4 percent after announcing a deal with its partner in Russia, the Alfa Group. The companies will pool their Russian and Ukrainian holdings into a New-York listed mobile operator, ending one of the longest corporate wars Russia has ever seen.
The euro zone's services economy returned to growth for the first time in 16 months in September at a slightly better rate than first expected, but job losses grew, a key survey showed.
Later in the session, investors' attention will turn to the PMI services data in the United States. (Editing by David Cowell)