UPDATE 2-European shares hand back gains after White House dampens Sino-U.S. trade optimism

  • Reuters
  • Stock Market News
UPDATE 2-European shares hand back gains after White House dampens Sino-U.S. trade optimism
Credit: © Reuters.

* White House says no agreements done ahead of trade talks

* DAX outperforms most bourses

* Bayer soars after Elliot reveals stake

* H&M shines on summer collection sales (Updates to close)

By Susan Mathew

June 27 (Reuters) - European shares handed back gains to close flat on Thursday after comments from the White House undid optimism over a potential Sino-U.S. trade deal, while a strong rally in shares of chemicals giant Bayer propped up German equities.

The pan-European STOXX 600 index .STOXX rose as much as 0.4% earlier in the day, spurred by signs overnight of progress between Washington and Beijing in resolving their trade dispute that has roiled markets for the past year.

However, White house adviser Larry Kudlow said on Thursday no specific agreements had been made ahead of talks between U.S. President Donald Trump and his Chinese counterpart Xi Jinping this weekend and Washington was still insisting on structural changes on intellectual property and enforcement mechanisms. Trump administration official also told Reuters that lifting sanctions on Chinese telecom equipment maker Huawei Technologies seemed unlikely. warned against excessive optimism.

"China is unlikely to make more concessions than they have already made and certainly they will not make the type of concessions that Trump is expecting and eventually the trade war will resume," said Simona Gambarini, a markets economist at Capital Economics in London said before the White House comments.

Losses were led by the real estate .SX86P and energy .SXEP sectors, down 1.1% and 0.8% respectively.

While most major country indexes in the region closed flat to lower, Germany's trade-sensitive DAX .GDAXI outperformed, up 0.2%, boosted by Bayer's 8.7% rally.

Bayer BAYGn.DE surged after the group hired a lawyer and formed a committee to address glyphosate litigation, and as activist shareholder Elliott Associates said it had built up a 1.1 billion euros stake in the company and considered the stock undervalued. biggest gainer on the STOXX 600 index was H&M HMb.ST , up 13.7% after the Swedish fashion retailer said sales of its summer collections had gotten off to a good start and that it was selling more clothes at full price. upbeat tone drove a 2.2% rise in the retail sector.

On the flip side, Chr Hansen CHRH.CO tumbled 13.8% after the Danish food ingredients maker cut its revenue outlook for the year, hit by a disappointing performance at its food colouring and animal health businesses in the latest quarter.

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