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* Asia restrictions, China data weigh
* Kinnevik jumps to top of STOXX 600
* Spain's Telefonica gains as it seeks buyers for delivery
arm
* Sanofi, GSK gain as COVID-19 vaccine shows immune response
(Updates with market close)
By Shashank Nayar and Sruthi Shankar
May 17 (Reuters) - European stocks ended flat on Monday as
underwhelming Chinese data and caution over the spread of a
COVID-19 variant outweighed optimism on the reopening of the
British economy, while Sweden's Kinnevik surged and was the top
performer.
The pan-European STOXX 600 index ended flat with
travel and leisure stocks being the top losers, down
2.3%, while telecommunication stocks jumped the most,
led by gains in Spanish telecom firm Telefonica
Dampening sentiment was data showing that China's factories
slowed their output growth in April and retail sales
significantly missed expectations as officials warned of new
problems affecting the economic recovery.
Meanwhile, fresh restrictions across Asia following a new
wave of COVID-19 cases and concerns over the spread of a
fast-spreading coronavirus variant first identified in India
overshadowed optimism on UK's economic reopening.
"Airlines are on the back foot once again today, with
optimism over the reopening of international travel proving
short-lived given concerns over the growth of the Indian COVID
variant," said Joshua Mahony, senior market analyst at IG.
"Unfortunately, the risks posed by this latest strain also
raise questions around those same businesses that have just
found reprieve from lockdown restrictions, with pub and
restaurant chains all on the back foot despite the resumption of
indoor dining," added Mahony.
Britain's domestically focused mid-cap index dropped
0.6%, with restaurant and pub operator SSP Group and
airlines Easyjet and Wizz Air Holdings being
the top drags.
Irish airline Ryanair fell 2.8% after reporting a
record annual after-tax loss, as it said there were signs the
recovery had begun.
European stocks have performed well so far and surged to
all-time highs this month, with the STOXX 600 up nearly 11% so
far this year as economic recovery prospects and strong earnings
drew buyers of equities.
The European Union has agreed to a partial truce with the
United States in a dispute over metal tariffs imposed by former
President Donald Trump and to start discussions on global
overcapacity and China's "trade-distorting" policies.
Mining stocks gained 0.9%.
In corporate news, Sweden's Kinnevik jumped 8.5%
to the top of the STOXX 600 index after the company transferred
its stake in online fashion retailer Zalando to
shareholders.
Spanish telecoms group Telefonica gained 3.5% as it
is seeking buyers for its logistics and express-delivery unit
Zeleris, a source familiar with the offer said on Monday, amid a
months-long boom in the business as COVID-19 pushes people to
shop online.
Drugmakers Sanofi and GlaxoSmithKline
jumped 1% and 0.7% respectively after their experimental
COVID-19 vaccine showed a robust immune response in early-stage
clinical trial results, enabling them to move to a late-stage
study.
(Reporting by Sruthi Shankar and Shashank Nayar in Bengaluru;
Editing by Subhranshu Sahu and Dan Grebler)
