UPDATE 2-Basic material, luxury stocks drive European shares to a third day of losses

* UK travel shares surge ahead of complete re-opening

* Luxury stocks slip after mixed results

* Ericsson slides as earnings hit by China
(Updates to close)

By Sruthi Shankar and Susan Mathew

July 16 (Reuters) - European stocks fell on Friday as a
slide in Rio Tinto's iron ore exports hammered mining majors,
while strong earnings from luxury brands were overshadowed by
concerns about their sustainability amid surging COVID-19 cases.

The pan-European STOXX 600 index reversed early
gains to end lower for a third straight session, down 0.3%,
taking weekly losses to 0.6%.

The mining index slumped 2.8% as Rio Tinto
slipped 3.4% after reporting a 12% fall in quarterly iron ore
shipments ahead of earnings, and dragging other big names such
as BHP and Glencore 1.5% and 3.5% lower
respectively.

Concerns about higher inflation and rising COVID-19
infections causing a slowdown in economic recovery have weighed
on investors' minds this week, driving many to the safety of
bond markets and making it harder for record-high equities to
build on gains.

"On one hand, a strong start to U.S. Q2 earnings season and
dovish rhetoric from central banks continued to provide support.
(But), several factors have weighed on the outlook, including
weaker activity data out of China, signs that growth and
earnings have peaked," said Silvia Dall'Angelo, senior
economist, at the international business of Federated Hermes.

Eyes next week will be on the European Central Bank meeting,
to see if a change in monetary policy is on the cards following
its recent strategy update.

Sweden's Ericsson lost 9.4%, after the telecoms
company after it reported second-quarter core earnings below
market estimates, hit by a decline in sales in mainland China.

Luxury stocks tumbled with Burberry down
almost 5% despite strong sales. No change to full-year forecast
could signal the improvement cannot be sustained, an analyst
said.

Richemont also lost 0.9% despite strong results,
while Louis Vuitton owner LVMH's 1.3% slide weighed
the most on the STOXX 600 and helped push France's CAC 40
to its third straight weekly loss.

Defensive sectors were the gainers, with real estate
, utilities and healthcare rising
between 0.5% and 1% as worries about the coronavirus remained.

England's coronavirus crisis could return again surprisingly
quickly, the British government's chief medical adviser said,
ahead of lifting of all pandemic-led restrictions on Monday
despite rising COVID-19 cases.

Travel and leisure stocks gained 0.4%, with shares
in UK's Whitbread, Intercontinental Hotels and
British-Airways owner IAG up almost 3%.

President Joe Biden said on Thursday the United States is
reviewing when it can lift restrictions that ban most-non U.S.
citizens from travelling to the United States from much of
Europe.

Topping the pan-region index on the day was a 14% surge by
tech company Sinch, while other Swedish names such as
Getinge and Addtech followed, rallying
after positive earnings updates.

(Reporting by Sruthi Shankar in Bengaluru; editing by
Uttaresh.V and Toby Chopra)