European stocks make strong start to September, record high in sight
(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window)
* Retail, travel stocks among best performers
* Yields extends gains, lift banks
* Euro zone August factory growth strong - PMI
* Carrefour worst performer on STOXX 600 (Updates to market close)
By Sruthi Shankar and Ambar Warrick
Sept 1 (Reuters) - European stocks closed higher on Wednesday as fresh signs of weakness in Asian economies were offset by hopes for more stimulus, while investors shook off concerns about rising inflation.
After seven straight months of gains, the pan-European STOXX 600 .STOXX rose 0.5% to end at 473.12 points, and was within striking distance of its record high of 476.16.
Retail .SXRP and travel & leisure .SXTP stocks were the top sectoral gainers, rising 1.8% each.
Airline SAS SAS.ST gained 2.4% after reporting a smaller quarterly loss as air travel gradually picked up.
Consumer-exposed sectors benefited from data that showed euro zone unemployment fell as expected in July.
Spain's Inditex ITX.MC , which owns fashion brand Zara, was among the best performing retail stocks after JP Morgan forecast strong second-quarter results for the firm. The stock rose 3.1%.
A survey also showed euro zone manufacturing growth remained strong in August, but supply chain issues drove up prices and fed into inflation, which could affect monetary policy in the near term.
Investors were unsettled after data on Tuesday showed euro zone inflation surged to a 10-year-high in August, while an European Central Bank policymaker called on the bank to reduce its emergency bond purchases as soon as the next quarter.
The bloc's banks .SX7P continued to benefit from rising government bond yields.
"Elevated inflation in the U.S. and Europe, weak retail sales in Germany and a slowdown in China all suggest that the market should be factoring in a temporary slowdown in economic activity," Sebastien Galy, senior macro strategist at Nordea Asset Management, said.
"What the market is focused on instead is that liquidity should remain very ample from the People's Bank of China to a slow pace of tapering from the Fed and eventually one from the ECB."
Supermarket group Carrefour CARR.PA was the worst performer on the STOXX 600, down 5.5% as luxury goods billionaire Bernard Arnault sold the 5.7% stake he owned in the company.
French spirits maker Pernod Ricard PERP.PA rose 3.7% after it posted a stronger-than-expected rise in full-year operating profit, driven by a strong rebound in demand in China and the United States.
French diagnostics specialist BioMerieux BIOX.PA climbed 4.0% after it confirmed its full-year earnings target.
European stocks benchmark hovers below record highs Link
Reporting by Sruthi Shankar in Bengaluru
Editing by Shounak Dasgupta and Mark Potter
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