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* STOXX Europe 600 index closes flat
* Amec Foster, Berendsen sink after updates
* Deutsche Bank posts surprise profit
By Danilo Masoni and Atul Prakash
MILAN/LONODN, Oct 27 (Reuters) - European shares steadied atthe close on Thursday, with stronger pharmaceutical and bankingstocks offsetting a slump in companies like Amec Foster and Berendsen.
The pan-European STOXX 600 index ended flat inpercentage terms after moving in and out of positive territoryseveral times during the day, with healthcare stocks leading sectoral gainers as they recovered from recent losses.
However, UK engineering firm Amec Foster sank morethan 20 percent, the worst performer in the STOXX 600 index,after saying that 2016 and 2017 trading would be in line withits board's expectations.
"Amec Foster's strategy review revealed the extent of thework that needs to be done to keep the business on an even keel.Today's announcement suggests that even with a slightly improvedoil price, it's going to be a long, slow climb," said NicholasHyett, equity analyst at Hargreaves Lansdown.
"Berendsen is the latest support services business to take adive. In what has in the past been quite an old-fashionedindustry, it seems the group's operations are struggling to keeppace with the more flexible laundry service being offered toclients."
Berendsen fell 16.3 percent after the commerciallaundry company issued a profit warning, citinghigher-than-expected costs.
Among other notable fallers, Swiss engineer ABB fell 6.6 percent as its orders slipped for the sixth quarter andwere not forecast to rise soon.
Finnish telecoms equipment group Nokia dropped7.6 percent after reporting a sharp drop in third-quarterearnings.
However gains in several companies offset the losses.
Franco-Italian chipmaker STMicroelectronics jumpedmore than 10 percent as the company said it expected improvedprofitability in 2016 after strong demand for smartphones helpedboost third-quarter sales and profits. Its peer AMS alsorose 5.8 percent.
Financials were in demand. Sentiment was propped up by areassuring update from German lender Deutsche Bank,up 0.6 percent. Even though it gave no timing for a deal withU.S. authorities over a multi-billion dollar fine, it unveiled asurprise third quarter net profit on a surge in bond trading.
"All in the right direction," analysts at Morgan Stanley,who have an "equal-weight" rating on Deutsche Bank, said."Revenues were stronger and the bank is delivering on costs withthis quarter being a fourth consecutive one of declining opex."
Britain's Barclays rose 4.8 percent after aforecast-beating jump in third quarter profits, while Spain'sBBVA rose 2.8 percent after posting a higher thanexpected rise in third-quarter profit, surprising markets byreaching its capital target a year ahead of schedule.
Pharmaceutical stocks also gathered momentum. Fresenius shares rose 2.1 percent after the German healthcaregroup said that cost cuts, business overhauls and the launch ofgeneric drugs in North America benefited the company, which alsoraised its earnings guidance. (Reporting by Danilo Masoni and Atul Prakash; Editing by TomHeneghan)
