* Mining stocks mark third straight week of gains, outpace peers
* Manufacturing activity strengthens in Feb
* Feb service sector activity hit by lockdowns
* STOXX 600 up 0.2% this week (Updates to market close)
By Sagarika Jaisinghani and Ambar Warrick
Feb 19 (Reuters) - Euro zone shares rose on Friday, marking a third week of gains, as data showed factory activity in February jumped to a three-year high, while upbeat quarterly earnings boosted confidence in a broader economic recovery.
The euro zone index .STOXXE was up 0.9%, with strong earnings from companies such as Acciona ANA.MC and Hermes HRMS.PA brewing some optimism over an eventual economic recovery. pan-European STOXX 600 index .STOXX rose 0.5%, as regional factory activity was seen reaching a three-year high on strong demand for manufactured goods at home and overseas. reading showed the euro zone's current account surplus widened in December on a rise in trade surplus and a narrower deficit in secondary income. the STOXX 600 marked small gains for the week, having dropped for the past three sessions as investor concern grew over rising inflation and a rocky COVID-19 vaccine rollout.
But basic resources stocks .SXPP outpaced their peers this week with a 7% jump, as improving industrial activity across the globe drove up commodity prices.
"This week's slightly adverse price action has all the hallmarks of a loss of momentum temporarily and not a structural turn," said Jeffrey Halley, senior market analyst at OANDA.
"There is not a major central bank in the world thinking about taking their foot off the monetary spigot, except perhaps China. (Markets) will remain awash in zero percent central bank money through all of 2021 (and) a lot of that will head to the equity market."
Minutes of the European Central Bank's January meeting, released on Thursday, showed policymakers expressed fresh concerns over the euro's strength but appeared relaxed over the recent rise in government bond yields. bank's relaxed stance was justified by the euro zone economy requiring continued monetary and fiscal support, as evidenced by a contraction in the bloc's dominant services industry in February.
The STOXX 600 has rebounded more than 50% since crashing to multi-year lows in March 2020, with hopes of a global economic rebound this year sparking demand for sectors such as energy, mining, banks and industrial goods.
London's FTSE 100 .FTSE lagged regional bourses on Friday due to a slump in January retail sales and as the pound jumped to its highest against the dollar in nearly three years. .L GBP/
French carmaker Renault RENA.PA tumbled more than 4% after posting a record annual loss of 8 billion euros ($9.68 billion), while food group Danone DANO.PA and German insurer Allianz ALVG.DE rose following upbeat trading forecasts.
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