* Capgemini, Altran shares surge on 3.6 bln euro takeover
deal
* Auto, retail sectors lead losses
* London's FTSE ekes out slight gains
(Updates to close)
By Susan Mathew
June 25 (Reuters) - European shares extended losses to a
third day on Tuesday amid rising U.S.-Iranian tensions and
anxiety over Sino-U.S. trade, but strong gains by Capgemini and
Altran on a multi-billion-euro takeover deal helped cap losses.
The pan-European STOXX 600 index .STOXX dipped 0.1% in
thin trade with most of the Europe's country indexes in the red.
Sentiment remained shaky after three weeks of solid gains
that have reclaimed almost all of a May sell-off, which
generated European shares' worst monthly performance in more
than two years.
Already subdued in anticipation of headlines from Sino-U.S.
trade talks expected over the weekend, sentiment took a further
hit after U.S. President Donald Trump signed an executive order
imposing sanctions on Iran's Supreme Leader and other top
officials. MKTS/GLOB
London's FTSE rose slightly as energy and material stocks
countered losses in most other sectors on the back of rising
copper and oil prices. O/R MET/L
Losses on the broader index stemmed mainly from the retail,
auto and banking sectors.
Renault shares RENA.PA slipped 2%. Nissan Motor 7201.T
smashed hopes for a quick fix to strained relations with
Renault, saying inequality between the partners could unravel
their two-decade-old automaking alliance. Shares of France's Carrefour CARR.PA retreated a day after
it became the latest Western retailer to retreat from the
Chinese market. Rating agency Fitch downgraded the stock to
'BBB' from 'BBB+' after the announcement. banking sector .SX7P fell ahead of a handful of
speeches by U.S. Federal Reserve policy makers, including Chair
Jerome Powell.
The Fed is facing pressure from Trump to cut rates sharply
in the face of a slowing economy, and markets now believe firmly
that the panel will do so in July. Any indication to the contrary would be likely to drive up
short-term bond yields while also weakening stock markets, whose
rally this month has been driven by expectations of more
stimulus from both the Fed and the European Central Bank.
M&A CHEER
The technology sector .SX8P was up 0.4% on the back of
Capgemini's CAPP.PA purchase of smaller rival Altran ALTT.PA
for 3.6 billion euros. "We think the deal makes strategic sense, helping Capgemini
to capitalize on the digital transformation of industrial
companies," analysts at Credit Suisse wrote in a note.
Capgemini rose 8.4% to post its best day in 6-1/2 years,
while Altran surged 21.2% to reflect the selling price and
posted its biggest intraday gain in 16 years.
Germany's trade sensitive DAX index .GDAXI slipped 0.4%.
A U.S. official said on Monday that Trump was "comfortable
with any outcome" from the talks with Chinese President Xi
Jinping when they meet at a G20 summit this weekend, cooling
hopes for a substantive breakthrough.
"The U.S. ... communicated that the market shouldn't put up
their hopes too high for the coming G20 meeting," said Teeuwe
Mevissen, a senior market economist at Rabobank.
"The maximum that can be achieved is a temporary truce like
they did last time where they also decided to stop at least
raising tariffs further."
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Intraday price performance of Capgemini and Altran https://tmsnrt.rs/2ZMnUlL
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