UPDATE 2-Telecoms M&A lifts Europe, FTSE rallies despite record GDP slump

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* STOXX 600 marks fourth consecutive day of gains
* Swiss telecom co Sunrise hits record high on buyout offer
* Vaccine hopes, recovery optimism support wider sentiment
* FTSE 100 rallied 2% as investors shrug off 20% Q2 GDP drop

(Updates to market close)
By Sruthi Shankar
Aug 12 (Reuters) - European stocks rallied on Wednesday as a
billion-dollar takeover offer for Swiss firm Sunrise
Communications boosted the telecom sector and investors looked
past a collapse in Britain's quarterly economic output to bet on
a stimulus-driven recovery.
The pan-European STOXX 600 .STOXX closed 1.1% higher,
marking its fourth consecutive day of gains and settled near a
three-week high. Wall Street's benchmark S&P 500 .SPX headed
for a record high boosted by technology stocks. .N
Sunrise Communications SRCG.S surged 26.8% to a record
high after U.S. firm Liberty Global LBTYA.O launched a
takeover offer for the company in a deal valued at 6.8 billion
Swiss francs ($7.40 billion). Shares in German telecoms investor Freenet FNTGn.DE ,
Sunrise's largest shareholder, jumped 16.8%, while the broader
sector .SXKP gained 1.7% to lead sectoral gains.
"Consolidation between operators would be positive for the
industry as it would reduce competitive pressure on prices and
improve the return on capital," Domenico Ghilotti, an analyst at
Equita wrote in a note.
Meanwhile, London's FTSE 100 .FTSE jumped 2% as investors
focused on signs of a recovery in economic output in June,
shrugging off a record 20.4% plunge in the second quarter, the
largest contraction reported by any major economy. June output grew by 8.7% from May, just above economists'
average expectation in a Reuters poll for an 8% rise.
"It's been widely expected that the UK will be in a
recession. But the fact that May number was upgraded and the
June number was better than expectations, is offering a little
bit of encouragement," said Russ Mould, investment director at
AJ Bell.
"Markets are more interested in debating the pace of the
recovery."
Stock markets globally have rallied this week on improving
data from China and Europe, signs of progress in developing a
COVID-19 vaccine and expectations of fresh U.S. stimulus.
But U.S. House Speaker Nancy Pelosi said Democrats and the
Trump administration remained far apart regarding any agreement
over further economic aid. Among other individual movers, Dutch bank ABN Amro ABNd.AS
jumped 8.1% after it said its corporate bank will retreat to
northwest Europe, exiting the United States, Asia, Australia and
Brazil as it joins a growing list of banks restructuring their
commodities business to cut risk. European food-ordering firm Just Eat Takeaway.com NV
TKWY.AS JETJ.L rose 3.2% after reporting higher revenue and
underlying profit for the first half of 2020.
British online fashion retailer ASOS ASOS.L jumped 13.3%
as it forecast full-year sales and profit significantly ahead of
market expectations.