Best Stocks to Buy – UPDATE 1-Spanish shares lead declines in Europe; ASML, ING among gainers

(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window)

* ING jumps on beating Q4 expectations

* ASML among top gainers in tech sector

* STOXX 600 set for second straight weekly gain

* UK economy suffers record 9.9% slump in 2020 (Adds comments, bullets, background; Updates prices throughout)

Feb 12 (Reuters) – Spanish stocks led declines for European shares on Friday, while the STOXX 600 remained on track to end its second week higher as shares of ASML and ING boosted the blue-chip index.

The pan-European STOXX 600 index dipped 0.2%, after having gained nearly 4% so far this month.

Spain’s IBEX 35 index shed 1.0%, with data showing consumer prices rising 0.5% year-on-year in January, slightly below a Reuters poll of 0.6% and compared to a 0.5% decrease in December.

ING Groep NV jumped 4.8% after the largest Dutch bank reported better-than-expected quarterly pre-tax earnings of 1.05 billion euros ($1.27 billion).

ASML Holding NV rose 2% after the Dutch equipment maker said chip shortages slowing car production were a symptom of broader increased demand that is placing strains on suppliers across the semiconductor sector.

European technology stocks rose 0.4%, among the few sectors in positive territory in early trading.

The STOXX 600 is about 5% away from its peak of February 2020 after rallying 50% since a crash in March, aided by historic monetary and fiscal stimulus.

Analysts expect growth in corporate earnings this year, driven by stimulus-induced liquidity, but are wary of next year as the measures may start to fade.

“The recent highs have been predicated on hopes of stimulus and of course the vaccine roll-outs, but we’re still not out of the woods … and the market is potentially overdue a reckoning,” said Connor Campbell, analyst at spreadbetter Spreadex.

“Once the (U.S. stimulus) package has been implemented, it will be interesting to see how markets will behave, as they will no longer have this big thing to cling on to.”

Market participants were hopeful that a proposed $1.9 trillion U.S. stimulus bill would be passed soon by lawmakers, with data showing a stalling recovery in the U.S. labour market strengthening the case for it.

Britain’s coronavirus-ravaged economy shrank 9.9% in 2020, the biggest annual fall in output since modern records began, but it avoided heading back towards recession at the end of last year, official figures showed on Friday. London’s FTSE 100 index was 0.2% lower.

Among other stocks, Boliden AB gained 5.4% after the mining and smelting group reported quarterly earnings ahead of market forecasts.

Eutelsat Communications SA jumped 9% as the French satellite company reported half-year results slightly ahead of analysts’ expectations. (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)