UPDATE 2-European stocks slip after recent surge, all eyes on Trump-Biden debate

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* Banks lead decline after Monday's strong surge

* All eyes on first Trump-Biden debate

* Global coronavirus deaths rise above 1 mln

(Updates to market close)

By Sruthi Shankar

Sept 29 (Reuters) - European stocks slipped on Tuesday after solid gains in the previous session, with banks, energy and insurance sectors sliding as coronavirus cases mounted globally.

Investors were mostly in a wait-and-see mode as U.S. Democratic presidential nominee Joe Biden and President Donald Trump prepared for their first debate, five weeks before the presidential election. 90-minute showdown will begin at 0100 GMT on Wednesday, with investors seeking hints on policy outlook.

The pan-European STOXX 600 .STOXX closed down 0.5%, in line with tepid moves across global markets also watching for progress in talks on more U.S. fiscal stimulus.

Banks .SX7P handed back some of the previous session's 5.6% gain, while other economically sensitive sectors like insurers .SXIP and energy .SXEP fell more than 1.5% as the global COVID-19 death toll crossed 1 million, a Reuters tally showed. many investors counted on continued stimulus from central banks and governments to prop up the global economy reeling from the health crisis.

"Our stance on equities is still constructive in the medium-term, even if it's bumpy ride due to risks including Brexit, U.S.-China trade friction and uncertainty around the U.S. election," said Michele Morganti, equity strategist at Generali (MI: GASI ) Insurance Asset Management.

"We feel that recovery is still in place and cyclicals will continue to find favour, and that will help the undervalued regions like Europe versus U.S."

Solid gains for European markets on Monday helped the STOXX 600 turn positive for the third quarter, while the benchmark is on course to end September with a more than 1% drop, its biggest since a near 15% decline in March, when pandemic fears hit a peak.

Sensor specialist AMS AMS.S jumped 6.6% to the top of STOXX 600, with traders pointing to supportive news about lighting group Osram OSRn.DE , which it recently took over. plumbing parts distributor Ferguson FERG.L gained 6.0% as it restored its dividend after a series of cost-reduction measures and resilience in its main U.S. business helped it report a 4.1% rise in annual profit. baker Greggs GRG.L slid 8.1% as it cautioned that the outlook was uncertain because of the pandemic and it would have to cut staff jobs and hours. valves maker Neles NELES.HE gained 2.2% after Valmet VALMT.HE approached the company with a merger proposal, challenging a $2 billion bid that Neles' board recommended from Swedish engineering group Alfa Laval ALFA.ST . Valmet shares dropped 4.9%.