UPDATE 2-European stocks hit record as miners boost, log best week since early May


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    * STOXX marks weekly rise of 1.1% 
    * Miners jump, boosting UK's FTSE 100
    * Banks under pressure as yields fall

 (Adds comments, updates prices throughout)
    By Sruthi Shankar and Shreyashi Sanyal
    June 11 (Reuters) - European stocks scaled a record high on
Friday, buoyed by hopes that major central banks will remain
accommodative despite signs of rising inflation, while a rally
in miners boosted UK shares.
    The pan-European STOXX 600 index  .STOXX  rose 0.7% in its
sixth straight session of gains and ended the week 1.1% higher,
its best weekly performance since early May.
    Miners  .SXPP  jumped 1.9%, lifting UK's commodity-heavy
FTSE 100  .FTSE  by 0.7% after data showed Britain's economic
output in April was a record 27.6% larger than a year before.
    Travel and leisure stocks  .SXTP  bounced from the previous
session's drop. Spanish hotel chain Melia  MEL.MC  rose 2.0%
after its chief executive forecast a return to profitability in
June after 15 months in the red.  urn:newsml:reuters.com:*:nL2N2NS1YQ
    Reopening optimism has pushed Europe's stock markets to
record highs, with investors rotating into cyclical sectors such
as commodities, industrials and banks that tend to benefit from
an economic recovery.
    The European Central Bank raised its growth and inflation
projections for the euro zone on Thursday but pledged a steady
flow of stimulus over the summer, easing investor concerns about
an early dialling back of the bank's support.  urn:newsml:reuters.com:*:nL2N2NS0FH
    "Price pressures remain subdued in Europe. Even after its
upwards revisions to the inflation forecasts, the ECB does not
expect inflation to reach 2% within its projection horizon,"
analysts at BCA Research wrote in a note.
    "While the central bank will want to prepare the market for
tapering by the December meeting, it will delay a decision to
reduce asset purchases as much as possible."
    Euro zone government bond yields fell after the decision,
weighing on banking stocks. An index of the bloc's lenders
 .SX7E  dropped 0.2%.  GVD/EUR  
    "Some sectors have lagged, notably financials which are
seeing a little bit of underperformance on the back of softer
bond yields... Other underperformers have been in the travel and
leisure sector, as delays to reopening prompted British Airways
to put some of their staff back on furlough," said Michael
Hewson, chief market analyst at CMC Markets in London.     
    Bank of America's data showed equity funds saw tiny inflows
in the week to Wednesday as investors cut positions in
high-growth U.S. stocks while adding some in Europe.
    French reinsurer Scor  SCOR.PA  jumped 8.4% after top
shareholder Covea agreed to an orderly exit from the company
following a settlement over a frustrated takeover attempt and
ensuing legal disputes.  urn:newsml:reuters.com:*:nL5N2NS5PN

 (Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru;
Editing by Subhranshu Sahu)
 ((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961
144 3740; Twitter: https://twitter.com/s_shreyashi;))

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