European shares close higher; miners, data support

* FTSEurofirst 300 closes 0.5 percent higher

* Strong miners, robust economic data help equities

* Financials under pressure; AXA down 1.6 pct

By Atul Prakash

LONDON, Dec 11 (Reuters) - European equities advanced for a second straight session on Friday, boosted by mining shares, after U.S. reports showed November retail sales rose more than expected and consumer sentiment improved in early December.

The FTSEurofirst 300 .FTEU3 index of top European shares closed 0.5 percent higher at 1,010.16 points, but fell 1.5 percent this week after gaining 2.6 percent last week.

The index is up 21 percent this year and has surged 56 percent since hitting a record low in March.

Investor appetite grew for risky assets such as equities, with the VDAX-NEW volatility index .V1XI falling 6 percent. The lower the index, which is based on sell and buy options on Frankfurt's top-30 stocks <0#.GDAXI>, the higher the market's desire to take risk.

Miners were among the top gainers, helped by firmer metal prices which rose on data showing Chinese industrial output soared in November -- the fastest pace since June 2007, highlighting the economy's recovery from the global downturn.

Global miner BHP Billiton (BLT.L), Anglo American (AAL.L), Antofagasta (ANTO.L), Rio Tinto (RIO.L) and Xstrata (XTA.L) rose 1.3 to 1.8 percent.

"The stock market is in a good shape today ... triggered by good economic data," said Giuseppe-Guido Amato, strategist at Lang & Schwarz in Frankfurt.

"We have no selling pressure. I think December will be a good month for equities. The underlying trend is further on the upside," Amato added.

Robust data raised hopes that a self-sustaining economic recovery was starting to unfold. Total U.S. retail sales rose 1.3 percent last month, the largest advance since August, after rising 1.1 percent in October. It was the second straight monthly gain, beating expectations for a 0.7 percent gain.

Reuters/University of Michigan Surveys of Consumers said sentiment improved in early December on signs of stabilisation in the labour market and widespread discounts to entice holiday shoppers. [ID:nN11258525]

Across Europe, Britain's FTSE 100 index .FTSE, Germany's DAX .GDAXI and France's CAC 40 .FCHI rose between 0.1 percent and 0.8 percent.

CHEMICALS ADVANCE

Chemical companies were also in demand. Bayer (BAYGn.DE), Umicore (UMI.BR), BASF (BASF.DE), Akzo Nobel (AKZO.AS) and Linde (LING.DE) rose 1.8 to 3.9 percent.

"Equities are in a sweet spot and this could last for a few months, with economic growth returning while central banks remain very cautious," said Jean-Marie Mercadal, chief investment officer of OFI Asset Management in Paris.

"There has been a bit of hesitation since September, but the environment remains positive for stocks, which will also be supported by strong inflows in the asset class, as well as the return of mergers and acquisitions."

But financial shares came under pressure. AXA (AXAF.PA) fell 1.6 percent. Sources with direct knowledge of the matter told Reuters the French insurer had put the auction of its stake in China's Taikang Life on hold on growing concerns that some potential buyers may be restricted under rules proposed by the insurance regulator.

Shares of major European bank stocks, hurt this week by fears over public finances of Greece and Spain, remained weak.

HSBC (HSBA.L), Barclays (BARC.L), Lloyds (LLOY.L), Royal Bank of Scotland (RBS.L), Natixis (CNAT.PA) and UBS (UBSN.VX) fell 1 to 3.4 percent.

Spanish and Greek banks also fell, with Banco Santander (SAN.MC) down 0.8 percent, BBVA (BBVA.MC) down 0.7 percent, Piraeus Bank (BOPr.AT) down 6.8 percent and National Bank of Greece (NBGr.AT) down 6.1 percent.

Dutch bancassurer ING (ING.AS) was up 1.6 percent after it said it will repay 5 billion euros in state support on Dec. 21, confirming its announced plans and fuelling speculation it may secure better terms on the remainder of its government aid. (Editing by David Holmes)