Caspian Sunrise Share News (CASP)

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LONDON, March 27 (Reuters) - European shares surged onTuesday after incipient signs of a detente in trade rhetoricbetween Washington and Beijing, while French supermarket Casinostole the limelight after sealing a partnership with Amazon.

Casino jumped 7.8 percent to lead Europe's STOXX600 after its grocery chain Monoprix said it would start sellingits products to Parisian customers through Amazon'sPrime Now service this year.

Despite Casino's share price gains, the retail indexunderperformed the wider market. Amazon's expansion into theEuropean grocery industry has struck fear into investors in somesupermarket stocks seen as less adapted to a new retailenvironment.

A 4.8 percent fall in H&M shares also draggedretail stocks down. The Swedish fashion firm flagged furthermarkdowns in the second quarter, reporting profits for Q1 fellroughly as expected.

The STOXX 600 index gained 1.4 percent, on trackfor its best day in seven weeks, while Germany's DAXled the pack with a 1.8 percent rise.

European markets took their cue from a robust rebound onWall Street and Asian stocks after reports the U.S. and Chinawere negotiating to avert a trade war which had sent stocksspiraling over the past weeks.

Shares in spreadbetting firms suffered losses at the openafter European markets regulator ESMA moved to restrictcontract-for-difference and binary options trading "to protectretail investors".

They recovered swiftly, however. IG Group was lasttrading down 0.5 percent, CMC Markets up 0.6 percentand Plus500 up 3.2 percent.(Reporting by Helen Reid, Editing by Kit Rees)