UPDATE 2-European shares end flat as mining gains offset broader losses

* PKO Bank tops STOXX 600
* BHP rises on strong H1 profit
* European mining index hits highest since July 2011
* European Q1 earnings outlook improves

(Updates to market close)
By Sagarika Jaisinghani and Ambar Warrick
Feb 16 (Reuters) - European shares ended flat around a
one-year peak on Tuesday as a boost from major mining and bank
stocks was tempered by losses in most other sectors, with
investors remaining uncertain over a euro zone economic
recovery.
The pan-European STOXX 600 .STOXX ended largely unchanged
after jumping 1.3% in the previous session to its highest level
since February 2020.
A 2% rise in shares of Glencore GLEN.L helped the European
mining index .SXPP climb to a near 10-year high, while higher
iron ore and base metal prices supported the sector. IRONORE/
MET/L
BHP Group BHPB.L , the world's largest miner by market
capitalization, rose 1.5% after posting its best first-half
profit in seven years and declaring a record interim dividend.

Commodity prices have benefited recently from expectations
that increased stimulus measures and steady vaccinations will
stoke global demand.
Energy stocks .SXEP rose 0.5% on stronger oil prices.
O/R
Bank stocks .SX7P rose to a more-than 11-month high as
investors bought into some sectors that have been severely hit
by the pandemic. But they still remained well below pre-COVID-19
levels.
Shares of Polish lender PKO Bank Polski PKO.WA topped the
STOXX 600 on upbeat expectations over a long-running foreign
currency mortgage issue. Data showed euro zone economic output contracted by less
than expected in the fourth quarter of 2020. Other readings showed German investor morale was high over
consumption picking up in the coming months, even as inflation
expectations in the euro zone's largest economy were seen
cooling. The STOXX 600 has struggled to reach pre-pandemic levels,
lagging its peers across the Atlantic as a new round of
lockdowns and disruptions to a vaccination drive hurt sentiment.
"The weakness in economic activity will continue to weigh on
output in the current quarter as restrictions curtail mobility
and businesses postpone reopening," analysts at TS Lombard wrote
in a note.
"Growth will bounce back strongly in H2 on the back of
pent-up demand and an easing of restrictions, although the
vigour in economic activity could be less than before."
Analysts hiked their first-quarter profit growth forecast
for European listed companies to 42.7% from the 41% that was
expected last week, according to Refinitiv data, on growing
expectations of an economic recovery this year.
But fourth-quarter earnings are now expected to have fallen
19.9% versus the 18.2% drop seen last week. Global equities have remained in demand as U.S. President
Joe Biden negotiates a $1.9 trillion stimulus package. In the
euro zone, finance ministers agreed on Monday that supportive
measures for the economy should stay in place as long as needed.