* FTSEurofirst 300 index gains 2 percent
* Euro zone banks advance for second day
* Mining, energy stocks track commods prices
By Atul Prakash
LONDON, March 11 (Reuters) - European shares bounced back on Friday, with a recovery in metal and oil prices boosting commodities stocks and the ECB’s bank funding plan continuing to support lenders in the euro zone periphery for a second day.
The pan-European FTSEurofirst 300 index was up 2 percent by 0910 GMT after falling 1.8 percent in the previous session. However, the index stayed on track for a weekly decline after gaining in the previous three straight weeks.
The euro zone’s Euro STOXX Banks index was up 4.8 percent after surging 8.5 percent on Thursday when the European Central Bank cut rates and said it would start buying corporate debt and even pay banks for lending to companies in the ailing euro area in a bid to kickstart growth.
Lenders like Banco Popular and Bankia of Spain and Italy’s UniCredit and Intesa Sanpaolo jumped 4.3 to 9.1 percent.
“While markets had a tantrum after (ECB President Mario) Draghi’s comment about not seeing rates going further into negative territory, we still see yesterday’s announcement as net positive,” Mike van Dulken, head of research at Accendo markets said.
“The overnight recovery in market sentiment suggests markets may be coming round to a similar view, the ugly indigestion finally subsiding.”
Commodities-related stocks were also in demand after prices of metals and crude oil rose.
The STOXX Europe 600 Basic Resources index gained 2 percent after prices of major industrial metals rose sharply. Glencore, Anglo American and Rio Tinto rose 2 to 3 percent.
However, analysts at Exane BNP Paribas said they were turning more cautious on the mining sector after a recent relief rally.
“The sector has outperformed by 17 percent from early February lows, when our 12-month valuation metrics displayed an average upside of c.30 percent for the miners,” they said.
“In this environment where visibility is low, we would advocate taking a more defensive approach as most metal markets remain unbalanced and therefore even more exposed to macro data volatility,” Exane analysts said in a note.
The European oil and gas index also advanced 1.7 percent, tracking higher crude oil prices.
Today’s European research round-up (Editing by Toby Chopra)