UPDATE 2-European stocks end flat as defensive gains offset auto slide

* Spanish bourse BME hits 4-year high

* Volkswagen cuts sales and profit forecast

* Defensive shares gain amid trade uncertainty

* FTSE 100 outperforms
(Updates to close, changes quotes, adds news items)

By Medha Singh and Agamoni Ghosh

Nov 18 (Reuters) - European stocks ended flat on Monday as a
spurt of defensive buying over uncertainty surrounding
U.S.-China trade talks helped temper losses in the auto sector.

The pan-European STOXX 600 index finished little
changed, after having spent most of the session in negative
territory.

The European automobiles and parts sector dropped
2.1%, its steepest fall in about four weeks, with Germany's
Volkswagen leading declines after it slashed its
operating profit and sales growth outlook due to slowdown in the
auto sector.

"Volkswagen is seen as a barometer for the industry and any
kind of warning from them can be concerning," said David Madden,
market analyst at CMC Markets in London.

This comes after a string of automakers including fellow
German peer Daimler and part supplier Continental
warned of tough times for an industry facing higher
investments into cleaner and self-driving technologies.

Also weighing on the sector was an over 3% decline in shares
of France's Peugeot after Deutsche Bank downgraded the
stock to "hold."

Conflicting trade headlines kept investors cautious with
sectors traditionally considered defensive, such as real estate
, utilities and healthcare leading
gains.

News on the trade war was conflicting. Sentiment in the
afternoon took a hit after a CNBC report said the mood in
Beijing about a deal was pessimistic due to U.S. President
Donald Trump's reluctance to roll back tariffs.

However, late in the session, the Trump administration
issued a new 90-day extension allowing U.S. companies to
continue doing business with China's Huawei Technologies Co Ltd
.

"The comments from both countries are getting hard to follow
now, they change their tone every other day," said Hubert de
Barochez, economist at Capital Economics, London.

Gains in defensive stocks including AstraZeneca,
GlaxoSmithKline and British American Tobacco
helped London's blue-chip FTSE 100 rise 0.1%, to
outperform the broader market.

Optimism surrounding a Sino-U.S. trade talks and better than
expected corporate results had helped STOXX 600 hit 4 year high
last week.

In a bright spot, shares of Bolsas y Mercados Espanoles
(BME) rocketed 38% as stock market operator Euronext
and Switzerland's SIX sparked a bidding war for the
Spanish firm, with both trying to snap up one of Europe's last
standalone stock exchanges.

Qiagen jumped 8% after the German genetic testing
company said it would start talks with several potential
suitors.
(Reporting by Medha Singh and Agamoni Ghosh in Bengaluru;
Editing by Shounak Dasgupta, Patrick Graham and Toby Chopra)