(Reuters) -European stocks jumped on Friday, led by gains in energy and retail sectors after the Federal Reserve said there would be no imminent move to tighten monetary policy, easing fears of rising U.S. inflation that pushed the STOXX 600 index into negative territory for the week. The pan-European STOXX 600 index rose 1.1%, with oil & gas and retail stocks leading the gains. The benchmark still fell 0.5% for the week as a rally in commodity prices and signs of quickening U.S. inflation raised fears about an earlier-than-expected interest rate hike by the U.S. Federal Reserve. However, sentiment improved on the U.S. Federal Reserve’s reassurances on monetary policy, as it also said it would not immediately reduce cash injections that have propped up financial markets. While price rises are less of a problem in the euro zone, investors have taken cues from Wall Street for most of the week. Analysts, however, say Europe remains an attractive pick for global investors. “We look at the valuation of markets and the valuations have favoured Europe for a number of years because it is more economically sensitive,” said Jeffrey Germain, investment group director at Brandes Investment Partners. Sebastian Raedler, investment strategist at BofA Global Research wrote: “We see a further 5% upside for the STOXX 600, as well as 10% further outperformance for cyclicals versus defensives, value versus growth and financials, all of which benefit from both accelerating growth and rising bond yields.” Separately, Bank of America’s weekly fund flow statistics showed that investors pulled out of tech equity funds and loaded up on inflation protection in the week ended May 12. Minutes from the European Central Bank’s latest policy meeting showed policymakers set the stage for a June 10 showdown over the future of their emergency bond purchases when they met in April, but stopped short of discussing their next move. Among individual stocks, Italy’s Banco BPM rose 3% after Deutsche Bank upgraded the stock to “buy”, saying the lender’s “speculative appeal” could increase in the next few months. French food group Danone slipped 0.3% after Goldman Sachs downgraded the stock to “sell”, saying weaker demographic trends, particularly in China, will weigh on its specialised nutrition business. Atlantia slipped 0.2% after the Italian infrastructure group reported a net loss in the first quarter and confirmed it would decide on the sale of its stake in motorway unit Autostrade by June 11. Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru; Editing by Rashmi Aich, Sherry Jacob-Phillips and Barbara Lewis Our Standards: The Thomson Reuters Trust Principles.