* STOXX 600 ends down 0.3 pct
* Banks fall as investors exit risky assets
* Positive outlook boosts H&M
* PostNL jumps on GS upgrade
* Downgrades weigh on Grifols, Carnival, Maersk (Adds closing prices)
LONDON, Sept 15 (Reuters) - European shares dipped on Friday as another North Korean missile launch softened appetite for riskier banks and miners but still scored their strongest week since July as attractive valuations tempted investors.
The pan-European STOXX 600 and euro zone stocks both fell 0.3 percent, while export oriented FTSE slumped 1.1 percent as the pound spiked higher after a Bank of England policymaker opened the door for a possible rate increase in the coming months.
Banks fell 0.9 percent after five straight days of gains, showing strain as investors shed the most risky assets, buying defensive sectors such as utilities, up 0.1 percent.
But European stocks posted their strongest week in two months, having hit a five-week high on Thursday as they recovered from a summer dip. Investors and analysts said attractive valuations capped losses for the region's equities.
"North Korea had little impact on markets," said Valentin Bissat, equity strategist at Mirabaud Asset Management, which upgraded its exposure to European stocks on Monday.
"European equities continue to benefit from solid growth, and U.S. investors also continue to be invested in European equities with more interesting valuation and the positive FX exchange rate that magnifies returns in USD."
Broker rating changes moved some of the top gainers and losers.
Pharma company Grifols dropped 3.3 percent as Kepler Cheuvreux analysts said a recovery in margins could take longer than expected, removing the stock from their Iberian top picks.
They pointed to the weaker dollar weighing on Grifols, which like many European healthcare companies is highly exposed to the United States.
Goldman Sachs strategists downgraded the sector to neutral last week citing its sensitivity to U.S. policies.
Cruise provider Carnival dropped 6.2 percent after Credit Suisse cut its rating to "neutral," citing increasing threats to demand in the top three cruise markets: the Caribbean, Mediterranean and China.
Moeller-Maersk fell 3.3 percent after BAML downgraded it to "underperform."
Top gainer was PostNL, up 2.1 percent after Goldman Sachs upgraded the Dutch postal services firm to a buy after recent share price weakness.
H&M shares rose 1.7 percent, helping the retail sector outperform for the second day, after the world's second largest clothing retailer said autumn sales had started well, though large mark-downs capped its third-quarter sales at 5 percent.
Goldman Sachs strategists said European stocks continue to attract investors concerned about rich valuations elsewhere, with strong inflows from international and European investors.
Euro zone stocks have outperformed the broader STOXX index year-to-date despite analysts and investors predicting the stronger euro may dent company earnings.
(Reporting by Helen Reid and Danilo Masoni, Editing by Kit Rees and Jon Boyle)