UPDATE 2-Weak business surveys cast pall over European stocks

* Euro zone business growth halts, German activity shrinks
* Money markets raise bets of further stimulus
* Banks lead losses; trade worries push miners, autos lower
* Commerzbank slides after Moody's slams restructuring plan
* TUI, EasyJet jump after Thomas Cook collapse

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By Susan Mathew
Sept 23 (Reuters) - Euro zone stock markets clocked their
worst day in one month on Monday after dismal business activity
readings from across the currency bloc deepened fears of a
looming recession and suggested more stimulus was required.
After logging five straight weeks of gains, euro zone stocks
.STOXXE slipped 1% as surveys showed growth in services and
manufacturing in the region stalled in September. As a result,
bets on rate cuts accelerated in euro zone money markets.
Germany's DAX index .GDAXI fell 1% to post its biggest
one-day fall since Aug 23 as the latest purchasing managers
numbers showed its manufacturing sector sinking deeper into
recession.
"If nothing else, the readings... all but guarantee that
ECB stimulus efforts will expand and be sustained," said Ken
Odeluga, a market analyst at City Index. "How effective they may
be is another question entirely."
European Central Bank chief Mario Draghi said the data
justified the bank's indefinite stimulus promised earlier this
month and reiterated his call on governments to step up their
efforts as monetary policy can only prop up domestic confidence.
Banks were the worst hit, with the eurozone banking index
.SX7E slumping 2.8. This included a 7.5% slump in Commerzbank
CBKG.DE after Moody's said the German bank's restructuring
plan is negative for its credit rating. GVD/EUR The broader pan-European index .STOXX that includes stocks
outside the euro zone slipped 0.8%, breaking three sessions of
gains.
Persistent concerns over U.S.-China trade tensions were also
a reason for investors to jettison stocks and move to the safety
of bonds. Market participants are still unconvinced that a trade
deal between the two countries is likely anytime soon. GVD/EUR
U.S. and Chinese officials described the deputy-level trade
talks last week as being "constructive" and "productive", but
this came after a Chinese agriculture delegation canceled a
visit to U.S. farms in Montana on Friday. "What we'd like to see is concrete progress and that is the
thing we're lacking," said IG Markets analyst Chris Beauchamp.
Trade-reliant sectors such as mining .SXPP , auto and parts
.SXAP and technology .SX8P were among the biggest decliners,
losing at least 1.7% each.
Shares of TUI TUIT.L jumped 7.2 to top the STOXX 600 and
EasyJet EZJ.L followed on expectations their businesses will
benefit from the collapse of British rival Thomas Cook TCG.L .
These moves, along with a drop in the pound GBP= , helped
limit losses on London's FTSE 100 .FTSE to 0.3%. .L GBP/