* STOXX marks a weekly increase of 1.1%
* Miners leap, increasing the UK’s FTSE 100
* Banks under pressure as yields fall (add comments, update prices throughout)
June 11 (Reuters) – European stocks hit a record high on Friday, supported by hopes that major central banks will remain accommodative despite signs of rising inflation, while a rally by miners boosted UK stocks .
The pan-European STOXX 600 index rose 0.7% in its sixth straight session of gains and ended the week up 1.1%, its best weekly performance since early May.
Miners jumped 1.9%, pushing the UK’s commodity-rich FTSE 100 up 0.7% after data showed UK economic output in April was a record 27.6% higher than the previous year.
Travel and leisure stocks rebounded from the decline in the previous session. Spanish hotel chain Melia rose 2.0% after its chief executive forecast a return to profitability in June after 15 months in the red.
The reopening of optimism has pushed European stock markets to record highs, with investors turning to cyclical sectors such as commodities, industrials and banks which tend to benefit from an economic recovery.
The European Central Bank on Thursday raised its growth and inflation projections for the euro area, but promised a steady stream of stimulus measures over the summer, allaying investor concerns about a rapid return of support from the bank.
“Price pressures remain moderate in Europe. Even after its upward revisions to inflation forecasts, the ECB does not expect inflation to reach 2% within its projection horizon, ”analysts from BCA Research wrote in a note.
“While the central bank will want to prepare the market for the reduction by the December meeting, it will delay the decision to reduce asset purchases as much as possible.”
Eurozone government bond yields fell after the decision, weighing on bank stocks. An index of block lenders fell 0.2%.
“Some sectors have fallen behind, notably Financials which is slightly underperforming due to lower bond yields … back on leave,” said Michael Hewson, chief market analyst at CMC Markets in London .
Data from Bank of America showed equity funds saw tiny inflows during the week to Wednesday, as investors reduced their positions in high-growth US stocks while adding more in Europe.
French reinsurer Scor jumped 8.4% after main shareholder Covea agreed to an orderly exit from the company following a settlement following a frustrated takeover attempt and ensuing legal disputes are tracked. (Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru; editing by Subhranshu Sahu)