UPDATE 2-European shares fall as ECB leaves policy unchanged with no new stimulus

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* ECB watching euro closely, keeps policy unchanged
* Most European sectors end in negative territory
* LVMH to counter sue Tiffany in fight over takeover
* EQT up as it readies sale of German energy services firm

(Updates price action, adds comments)
By Shreyashi Sanyal
Sept 10 (Reuters) - Major European bourses closed lower on
Thursday after the European Central Bank kept its policy rates
unchanged and said its existing stimulus measures were
sufficient and likely to be used in full.
The pan-European STOXX 600 .STOXX index dropped 0.6%, as
ECB President Christine Lagarde said the central bank is
carefully watching the implications of a strong euro. With the
economic recovery losing momentum there is an expectation that
the bank will at some point provide more stimulus. "The balanced tone struck by the ECB at today's meeting was
less dovish than many investors may have been expecting," said
Jai Malhi, global market strategist at J.P. Morgan Asset
Management.
"The lack of policy change at the ECB is much more to do
with the reduced effectiveness of the remaining options at its
disposal rather than the central bank being comfortable with the
current state of the economy."
Markets closely followed the latest back and forth between
the UK and the European Union involving Britain's exit from the
bloc.
The EU told Britain it should urgently scrap a plan to break
their divorce treaty but Prime Minister Boris Johnson's
government refused and instead pressed ahead with a draft law
that could sink four years of Brexit talks.
Rate-sensitive European banks .SX7P fell 0.5%, while
travel and leisure stocks .SXTP bounced 0.7% following steep
declines in the previous session.
Among stocks, LVMH LVMH.PA shares rose 0.1%, as the French
luxury goods group said it would counter-sue Tiffany, accusing
it of mismanagement through the coronavirus crisis after the
U.S. jeweller accused the French group of trying to bow out of a
$16 billion acquisition deal. Buyout firm EQT EQTAB.ST rose 2% on readying a sale of
German energy services firm Getec as it seeks to benefit from
high valuations for energy infrastructure assets, people
familiar with the matter said.
Volkswagen's VOWG_p.DE trucks arm Traton 8TRA.DE dropped
1% after it upped its takeover offer for U.S. peer Navistar
NAV.N to $43.00 per Navistar share, up from $35 per share.
Games Workshop GAW.L jumped 11.7% to the top of the STOXX
600 after saying trading in the three months to end August
topped its expectations.
Italy's Nexi NEXII.MI gained 6.8% after a report that the
payments firms and SIA are close to clearing a major hurdle to a
potential merger.