* STOXX up 0.5 percent, set for weekly fall of 0.7 pct
* Well-received earning updates lift Beazley, Hexpol, Skanska
* Intesa Sanpaolo rises as talk of imminent Generali bid cools
* Miners drop as metal prices weaken on China worries (Adds details, updates prices)
By Danilo Masoni
MILAN, Feb 3 (Reuters) - European shares rose on Friday, helped by well-received company updates and buoyant economic data, while mining stocks were hit by weaker metal prices.
The STOXX 600 was up 0.5 percent, bouncing back from losses seen in the previous session. The index is down 0.7 percent so far this week as caution about the impact of Donald Trump's policies has halted a rally in risky assets.
"I don't think the reflation trade could be long lasting," said Roberto Lottici, fund manager at Ifigest in Milan.
However Lottici said he remained quite upbeat about prospects for European equities, comforted by a good start to the earnings season and expectations that greater fiscal flexibility in Europe to counter protectionist U.S. policies could give more fuel to the region's economic recovery.
A survey on Friday showed euro zone businesses started 2017 by increasing activity at the same multi-year record pace they set in December and faster growth in demand suggested the good times will continue.
This week, Credit Suisse lifted its 2017 target for the Euro STOXX 50, with strategists at Swiss investment bank citing earnings prospects and solid growth in the region.
Top gainer on the STOXX on Friday was Beazley after the UK insurer reported a stronger than expected rise in full-year pretax profit. Its shares were up 8.4 percent.
Well-received results also boosted shares in Sweden's Hexpol and Skanska, but Spain's Banco Popular fell more than 5.9 percent after positing a full-year record 3.5 billion euros.
According to JP Morgan, earnings growth for Europe was at its best in more than two years, with the rebound broadly spread across sectors. It said 53 percent of the STOXX companies that had reported so far had beat EPS estimates, while 64 percent topped sales expectations.
Intesa Sanpaolo rose 1 percent, recovering some of its recent losses after the Italian lender denied it was preparing any paper bid for Generali. It also said possible industrial combinations with the country's biggest insurer continued to be the subject of a case study.
"The picture is increasingly blurred but it seems to me things are dragging out, possibly making Generali more vulnerable to a foreign takeover," said Ifigest's Lottici.
Generali was down 0.3 percent after spiking in the previous session on market speculation that a bid from Intesa was on its way.
Miners fell 1.9 percent, the biggest sectoral loser in Europe. Copper prices fell after China raised interest rates, spooking metals markets with fears that an erosion of cheap liquidity could stunt economic growth. (Reporting by Danilo Masoni)