UPDATE 2-European shares sink to 21-month lows as global selloff deepens


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    * Euro zone stocks down 1.8 pct, FTSE 100 down 2 pct
    * M&A hopes for Ingenico limit losses in tech stocks
    * Oil falls the hardest, defensives outperform

 (Updates prices, adds quotes, details)
    By Danilo Masoni and Helen Reid
    MILAN/LONDON, Oct 11 (Reuters) - European shares hit their
lowest in more than 21 months on Thursday following a slide on
Wall Street as jitters over rising U.S. Treasury yields and
signs of slowing global growth prompted broad selling of risky
    All sectors in Europe fell, though tech recovered some
losses thanks to M&A hopes. The big U.S. technology stocks that
have been the engine behind a multi-year bull market posted
heavy losses overnight but clawed back some losses on Thursday. 
    The euro zone's STOXX  .STOXXE  index extended losses during
the day to close down 1.7 percent, while Britain's FTSE 100
 .FTSE  fell 1.9 percent.
    The pan-European STOXX 600  .STOXX  benchmark index was down
2 percent to its lowest level since the end of December 2016,
suffering its worst day since June 25. It has lost 4.5 percent
so far this week.
    Even though Wall Street had its biggest drop in eight months
on Wednesday, triggering a global equity sell-off, the S&P 500
 .SPX  remains up 3.2 percent so far this year, while euro zone
stocks have lost 8 percent.
    European stocks have been penalised by political turmoil 
and the region's vulnerability to trade risks, while tax cuts,
share buybacks and a booming economy have boosted U.S. stocks.
    "The gap between the performance of U.S. and Eurozone
equities is no coincidence," said Patrick Moonen, multi-asset
strategist at Dutch asset manager NN Investment Partners. 
    "We think that for this picture to turn around in favour of
Europe we need to see a gradual rise in bond yields (providing
support to financials) accompanied by signs the economy is not
slowing and lower political risks," he added.
    While Wall Street staged a partial recovery on Thursday, it
did not pull Europe up in its wake, with some analysts saying
European stocks were still catching up with the fall in the
United States.
    European stocks have also been hit recently by worries over
their exposure to China and other emerging markets. 
    On Thursday market stress drove the volatility gauge for
euro zone stocks  .V2TX  to its highest level since May 28. 
    Europe's tech index  .SX8P  fell just 1 percent, thanks to a
7.6 percent rally in Ingenico  INGC.PA  after Natixis  CNAT.PA 
said it was examining a merger of its payments activities with
the financial and payments firm.  urn:newsml:reuters.com:*:nL8N1WR185  
    M&A hopes also boosted shares in Pandora  PNDORA.CO  which
rose 6.7 percent with traders citing rumours the company is
seeking advisers to fend off a possible acquisition bid.
    Defensive sectors such as healthcare, telecoms and real
estate outperformed the broader market, as investors sought to
limit the damage by turning to stocks that are attractively
valued and less exposed to slowdown in global growth.
    Among the biggest sectoral fallers were oil stocks  .SXEP ,
down 3.1 percent as oil slumped to two-week lows amid the
general anxiety on growth, which also took financial stocks
    Banks  .SX7P  fell 2.4 percent, financial services  .SXFP 
tumbled 2.9 percent and insurers  .SXIP  lost 3.1 percent.
    Bayer  BAYGn.DE  was an outlier, rising 3.1 percent after
its Monsanto unit received a tentative ruling for a new trial on
$250 million in punitive damages in a U.S. weed-killer case.
    Gold miners Randgold Resources  RRS.L  and Fresnillo
 FRES.L  also shone as safe haven buying drove gold prices up to
near three-week highs.  urn:newsml:reuters.com:*:nL4N1WR3NB

 (Reporting by Danilo Masoni and Helen Reid; Editing by Andrew
 ((Danilo.Masoni@TR.com; +39-02-66129734; Reuters Messaging:
danilo.masoni.thomsonreuters.com@reuters.net; On Twitter https://twitter.com/damasoni))

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