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* Diageo gains on capital return program
* Miners boost UK shares
* Commerzbank jumps after forecast lift (Adds comment, updates prices)
By Sruthi Shankar
May 12 (Reuters) - European stocks steadied on Wednesday after their worst selloff this year as strong earnings reports and signs of a speedy economic recovery offset concerns about a rapid rise in prices.
The pan-European STOXX 600 index rose 0.2% after falling almost 2% on Tuesday as investors offloaded riskier assets on worries that rising U.S. inflation could lead to tighter monetary policy.
Ample liquidity, a global semiconductor shortage and a recent rally in commodity prices are adding to fears of inflation as developed economies gradually reopen after lockdowns.
All eyes will be on U.S. consumer price data for April that is due later in the day, with analysts expecting a 3.6% lift in year-on-year prices, boosted by last April's low base.
"We suspect that the market knows about it, and is positioned for it," said Marija Veitmane, senior multi-asset strategist at State Street Global Markets.
"What we're not going to get an answer for and is really crucial is whether this increase in prices is transitory as the Fed is telling us or is it something more persistent that market is worried about."
UK's blue-chip FTSE 100 outperformed as data showed Britain's economy grew by a stronger-than-expected 2.1% in March from February.
Miners provided the biggest boost, with shares of Glencore, Anglo American and Rio Tinto gaining about a percent each as commodity prices continued to rally.
"We have a kind of central bank-sanctioned rally in commodities because they want the economy to run hot. That is great for industrials and materials and those stocks will continue to do well," added Veitmane.
European earnings are now expected to surge 90.2% in the first quarter, as per Refinitiv IBES data, up from a forecast of 83.1% growth last week.
German lender Commerzbank jumped 7.6% after it beat expectations for first-quarter profit and raised its revenue outlook.
Spirits maker Diageo rose 3.2% on restarting its capital return program, while Amsterdam-based technology investor Prosus NV gained 1.8% after plans to acquire up to 45.4% of shares in its parent Naspers.
French video games company Ubisoft fell 7.7% after it warned operating profit might fall this financial year. (Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva)