LONDON (Reuters) - European stocks closed up on Friday, led by banks and tracking a rally on Wall Street as retreating oil prices and U.S. data eased inflation concerns.

The FTSEurofirst 300 index of top European shares unofficially ended up 0.5 percent at 1,267.49 points, reversing early losses and way off the day's low of 1,247.54 points. The index rose for a second consecutive session after a six-day losing streak.

"At one stage earlier in the week it really did feel that the market was out of control," said Mike Lenhoff, chief strategist at Brewin Dolphin. "We could see a decent rebound looking into next week."

Wall Street indexes jumped between 1.2 and 1.8 percent as inflation concerns were soothed by retreating oil prices and a U.S. report showing May's consumer prices, excluding food and energy, rose according to economists' expectations.

Among top percentage gainers in the financial sector, Commerzbank (CBKG.DE: Quote, Profile, Research) added 5.8 percent and Dresdner Bank (ALVG.DE: Quote, Profile, Research) rose 4.1 percent after a source from Commerzbank's supervisory board said the two banks are in advanced talks about a merger.

In London HBOS HBOS.L added 13.7 percent, while Swiss lender UBS (UBSN.VX: Quote, Profile, Research) gained 5.2 percent.

(Reporting by Rebekah Curtis)