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* Euro zone business growth stalls in Sept -PMI
* German manufacturing recession deepens
* French business growth slows unexpectedly
* TUI jumps after Thomas Cook collapse
(Updates market action, adds comments)
By Shreyashi Sanyal and Sruthi Shankar
Sept 23 (Reuters) - Germany's main share index fell over 1%
on Monday, leading European markets lower after business
activity readings from across the euro zone suggested growth had
ground to a halt.
Surveys showed growth in services and manufacturing in the
euro zone, Germany and France had all stalled in September,
fanning concerns of a slide towards recession and suggesting
further support for the economy is required.
Euro zone stocks slipped 1.1%, while Germany's DAX
index tumbled 1.4% as the latest survey of purchasing
managers showed its manufacturing sector sinking deeper into
recession.
Banks were among the worst hit, with the eurozone banking
index slumping 2.6%, including a more than 5% fall for
Germany's Commerzbank.
The pan-European STOXX 600 index fell nearly 1%.
"A sense of caution is spreading across the board here and
is putting pressure on European markets and this may well
continue," said IG Markets analyst Chris Beauchamp
Investors also remained worried by mixed signals from
U.S.-China trade talks.
Over the weekend, the U.S. Trade Representative's office
issued a brief statement describing the two days of talks with
China as "productive." Wall Street had fallen, however, on
Friday after a Chinese agriculture delegation canceled a planned
visit to U.S. farm states.
Market participants are still unconvinced that a trade deal
between the two countries is likely anytime soon.
"What we'd like to see is concrete progress and that is the
thing we're lacking," Beauchamp said.
Early market action showed investors again turning to
defensive sectors such as utilities and food and
beverage, which were among the few gainers across the
main European sub-sectors.
The travel and leisure sector gained 0.3% with a
number of tour operators and airlines gaining from expectations
their businesses will benefit from the collapse of British rival
Thomas Cook.
Shares of TUI jumped 6.6%, the most on the STOXX
600, while EasyJet and Ryanair Holdings were
close behind.
(Reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru
Editing by Saumyadeb Chakrabarty and Patrick Graham)
