* KPN leads gains after Deutsche Telekom unit sale
* Meggitt tumbles as TransDigm drops bid
* Traders await ECB meeting on Thursday
(Updates to market close)
By Sruthi Shankar and Ambar Warrick
Sept 7 (Reuters) - European stocks ended lower on Tuesday as
caution kicked in ahead of a European Central Bank meeting later
this week, while focus turned to a flurry of telecom deals led
by Deutsche Telekom.
The pan-European STOXX 600 index slipped 0.5% after
coming close to a record high in the previous session. Utilities
, healthcare and chemical stocks were
among the top decliners.
Spurring moves in telecoms, Deutsche Telekom
struck a share-swap deal with SoftBank Group to
increase its stake in U.S. unit T-Mobile. The stock
fell slightly.
The company and Swedish telecoms operator Tele2
also agreed to sell their Dutch unit to private equity groups
for an enterprise value of 5.1 billion euros ($6.05 billion).
Dutch peer KPN rose 4.1%, leading gains on the
STOXX 600, while UK's BT fell 0.1% on news Deutsche
Telekom is weighing options for its 12% stake in BT.
The wider telecoms index rose 0.1%.
Caution prevailed ahead of the ECB meeting on Thursday, with
a recent surge in euro zone inflation and improving economic
data driving bets of tighter monetary policy.
"It's believed that the ECB is discussing tapering their
PEPP purchases. If it is, then investors will look for signs
that they are going to compensate by making purchases through
other schemes," said Andrea Cicione, head of strategy at TS
Lombard.
"The reason they wouldn't want to get ahead of the Fed is
because any hawkish remark by Lagarde or the ECB would cause
even more strength in the euro, which would be negative for
European growth."
The benchmark STOXX 600 has gained almost 19% so far this
year, slightly lagging New York's S&P 500, as relatively high
rates of vaccination brightened the recovery outlook, with many
people returning to offices following sweeping restrictions last
year.
Hopes of more economic stimulus for China and Japan, as well
as growing views the U.S. Federal Reserve is likely to delay the
start of tapering its asset purchases pushed world stocks to
record highs earlier.
British engineering firm Meggitt fell 12.1%, and
was the worst performer on the STOXX 600 after aerospace parts
maker TransDigm bowed out of a $8.7 billion takeover
battle for the firm.
The world's largest inter-dealer broker TP ICAP Group
slumped 10.7% after reporting a lower half-year
profit.
Upmarket fashion retailer Ted Baker climbed 0.2% as
sales surged during the second quarter as customers returned to
shops after months of coronavirus restrictions.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak
Dasgupta, Louise Heavens and Richard Chang)
