European shares extend gains on speculation of ECB action
* FTSEurofirst 300 gains 0.5 pct, hits 3-week high
* Euro zone's Euro STOXX 50 index sets 5-1/2-year peak
* Focus on euro zone inflation data at 0900 GMT
* Miners top sectoral gainers, Italian banks rally
By Atul Prakash
LONDON, March 31 (Reuters) - European equities rose for a fifth straight session to a three-week high on Monday on growing speculation that the European Central Bank could ease its policy and China might take steps to stimulate its economy.
At 0738 GMT, the FTSEurofirst 300 index was up 0.5 percent at 1,339.42 points after touching 1,340.73, the highest since early March. The euro zone's blue-chip Euro STOXX 50 rose 0.3 percent to a 5-1/2-year high of 3,185.67.
Italian banks rallied after the head of Italy's banking association said they will not require any state funds as a result of the ECB's stress tests this year.
Investors awaited the euro zone inflation data, due at 0900 GMT. A surprise fall in inflation for Spain and Germany on Friday raised pressure on the European Central Bank (ECB) to take additional measures at a policy meeting on Thursday to ward off the threat of deflation. Continuación...