REFILE-UPDATE 1-European shares limp as business recovery loses momentum

(Corrects typos in bullets two and three)
* FTSE 100 uninspired by surge in UK retail sales
* German manufacturing sector proves resilient in Aug - PMI
* Ireland's Kingspan jumps on upbeat forecast

By Sruthi Shankar
Aug 21 (Reuters) - European shares edged higher in thin
trading on Friday after data showed Germany's manufacturing
sector rebounded further in August, but gains were capped as
overall recovery in euro zone business activity stalled.
The German DAX .GDAXI gained 0.4% after the IHS Markit's
flash composite Purchasing Managers' index (PMI) showed factory
activity gauge rose to 53.0 from 51.0, hitting its highest level
in nearly two years. However, activity in services sector unexpectedly came to a
near standstill in Europe's largest economy amid renewed travel
restrictions.
Paris-listed shares .FCHI rose 0.2% after numbers showed
French business activity lost more momentum than expected in
August. The pan-European STOXX 600 index .STOXX was up 0.4%,
bouncing back after a downbeat outlook from the U.S. Federal
Reserve and weak U.S. data sparked a selloff on Thursday.
"It looks like investors got out of their concerns
yesterday, and are trying to push markets a bit higher," said
Connor Campbell, financial analyst at SpreadEx.
"But when the FTSE, the CAC and the DAX are moving in
different directions, that's sort of a sign of aimlessness among
investors."
The blue-chip FTSE 100 .FTSE slipped 0.2%, hit by a
stronger pound even as data showed retail sales surged past
their pre-coronavirus level in July, although economists feared
the broad recovery could prove temporary. .L
Despite Friday's small gains, the STOXX 600 was on course to
end the week flat-to-lower as several European countries saw a
resurgence in coronavirus cases and doubts about a U.S. recovery
also weighed on investor mind.
Travel and leisure stocks .SXTP were the biggest sectoral
gainers, up 1.6%, followed by gains in technology .SX8P and
mining .SXPP indexes.
Irish building and insulation materials firm Kingspan
KSP.I jumped 6.6% after its chief executive said the company
saw significant pent up demand post-lockdown. Swiss drugmaker Novartis NOVN.S gave the biggest boost to
the STOXX 600 after it won U.S. health regulator's approval to
repurpose an 11-year-old blood cancer drug against multiple
sclerosis. Dutch-based payment-processing company Adyen ADYEN.AS
extended losses as several top executives each sold 15% of their
stakes in the company, cashing in 693 million euros ($822
million) in all.