* STOXX 600 up 0.6 pct
* FTSE, mid-caps hit new record high
* Tenth week of inflows for European equities - BAML
* M&A volumes up 37 pct so far from last year
* Energy stocks, Vestas fall on U.S. climate withdrawal (ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon, see cpurl://apps.cp./cms/?pageId=livemarkets)
By Helen Reid
LONDON, June 2 (Reuters) - A wave of positive economic data lifted stocks across Europe and sent Britain's FTSE to a new record high, with cyclicals leading the way as investors maintained strong flows into the region.
The pan-European STOXX 600 was up 0.6 percent by 0720 GMT, while Euro zone stocks gained 0.9 percent and euro zone blue chips jumped 1.1 percent, set for their first weekly gain in a month.
Gains of 0.3 percent pushed Britain's FTSE up into positive territory for the week, inching up to a fresh record high of 7,585.4 points.
Positive employment and manufacturing data from the U.S. had sent world stocks to a record high earlier on Friday, at the end of what Bank of America Merrill Lynch called a 'risk-on' week of flows.
Banks led gains in Europe with auto stocks hot on their heels, helping push the carmaker-heavy DAX up 1.2 percent.
Shares in Daimler, BMW and Volkswagen rose despite a decline in monthly U.S. car sales.
Banks led gains on the CAC 40 and were the top boost to Italy's FTSE MIB as well.
Linde rose 1.7 percent, among top DAX gainers, after sealing a $73 billion merger deal with U.S. peer Praxair to create an industrial gases leader.
Merger and acquisition volumes are up 37 percent versus the same period last year, at $361 billion year-to-date, according to Reuters data. M&A has been a powerful engine driving shares higher.
U.S. President Trump delivered a blow to the renewable energy agenda, saying he would withdraw the United States from the landmark 2015 global agreement to fight climate change, though European and Asian leaders reaffirmed their commitment to it.
Shares in Danish wind energy provider Vestas fell 2.4 percent, on track for their worst weekly losses in six months.
Europe's energy stock index, which includes oil and gas as well as renewable companies, was the worst-performing, down 0.7 percent.
French pharmaceuticals firm Ipsen pared gains after jumping to a record high, as CFO Aymeric Le Chatelier doused investors' expectations of a potential 1.67 billion euro share buyback.
Le Chatelier said the group does not plan any large share buyback operation and that it merely meant to update market conditions for future share buybacks.
Ipsen remained at the top of the STOXX 600, up 3.5 percent.
Cable provider Prysmian secured a spot on Goldman Sachs' 'conviction' list of stocks, sending it up 3.1 percent among top European gainers.
B&M European Value Retail was among top fallers, down 3.3 percent after private equity firms CD&R and SSA sold a 12.5 percent stake in the firm.
European equities saw a 10th consecutive week of inflows, according to data from Bank of America Merrill Lynch which reaffirmed the region's attractiveness to international investors. (Reporting by Helen Reid; Editing by Vikram Subhedar and Keith Weir)