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* Italian utilities fall on negative RBC comments
* Marks and Spencer tops STOXX 600 as DB rates as 'buy'
* Markets await Powell's speech on Friday
* German business morale falls in August
(Updates to market close)
By Ambar Warrick and Sruthi Shankar
Aug 25 (Reuters) - European stocks ended unchanged on
Wednesday as losses in Italian utilities outweighed gains in
travel and bank stocks, while global markets were range-bound
ahead of a policy update from the U.S. Federal Reserve this
week.
The region-wide STOXX 600 index closed largely
unchanged at 471.84 points after a record close on Wall Street.
The European benchmark itself was just less than 1 percent away
from its peak.
Travel and leisure stocks gained 1.8% to hit their
highest level in almost two weeks, while banks rose
1.8%.
Utilities were the worst performing sector, falling
0.8% with major Italian utilities Terna, Snam
and Italgas leading losses after brokerage RBC turned
more negative on its expectations of future returns.
German stocks fell 0.3%.
Business morale fell for the second month running in August
as companies took a dimmer view about the coming months due to
rising numbers of COVID-19 cases and supply bottlenecks, a
survey from the Ifo institute showed.
Earlier this week, IHS Markit's survey showed the pace of
euro zone business growth dipped from July's two-decade-high.
"Equity markets (outside China) have not yet seen the usual
wobble associated with a PMI roll-over, so could be vulnerable,"
Robert Buckland at Citi's global strategy team said.
"Nevertheless, past experience suggests that investors
should buy any dip as long as another global recession is not
imminent. We don't think it is."
A Reuters poll of 18 strategists predicted strong earnings
will keep European stocks around current record levels for the
rest of 2021, while worries related to U.S. monetary policy
tightening, the German election and a Chinese regulatory
crackdown will cap gains.
Investors are watching German election updates. An opinion
poll released on Tuesday showed the centre-left Social Democrats
(SPD) pulling ahead of Chancellor Angela Merkel's conservatives
for the first time in 15 years, with a month before the vote.
Among stocks, Swedish radiation therapy equipment maker
Elekta slid 7.8% and was the worst performer on the
STOXX 600, after it flagged higher costs.
Deutsche Bank's recommendations spurred moves among retail
stocks, with Zara-owner Inditex and H&M
slipping over 1% after the brokerage rated them as "sell", while
Adidas and Puma rose 1.5% after an upgrade
to "buy".
Marks and Spencer Group was among the best
performers on the STOXX 600, rising 5.1% after Deutsche Bank
rated the apparel retailer as "buy".
(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak
Dasgupta)
