UPDATE 2-European stocks take a breather as tech, healthcare weigh

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* BP, Shell supported by oil output cut deal

* AstraZeneca slides after Gilead merger report

* Investors continue to move out of tech, healthcare
(Updates with market close)

By Sruthi Shankar

June 8 (Reuters) - European shares pulled back from
three-month highs on Monday, with losses in technology and
healthcare stocks halting a recent rally on hopes of a
post-coronavirus economic recovery.

The pan-European STOXX 600 closed 0.3% lower, as
investors moved out of sectors that remained resilient during
the coronavirus-led sell-off earlier this year, while bidding up
laggards such as banks and oil and gas firms.

Europe's healthcare index dropped 0.6%, with
AstraZeneca sliding 2.7% after Bloomberg reported it had
approached U.S. rival Gilead Sciences about a possible
merger to form one the world's largest drug companies.

Tech stocks were led lower by chipmakers ASML
, ASM International and STMicroelectronics
, which fell more than 4%. Europe's tech index is just
4.5% below its all-time high.

Meanwhile, euro zone banks jumped 2%, helping
lender-heavy bourses in Spain and Italy
outperform, supported by a bigger-than-expected pandemic-related
stimulus by the European Central Bank last week.

"We find the year-to-date underperformance of the European
banks, and the ECB actions, have created a compelling trading
opportunity to buy," KBW analysts wrote in a client note.

Euro zone stocks have rallied 39% from March lows,
while the broader European index has climbed about 33%
as countries reopened from weeks-long lockdowns, while improving
economic data and fresh stimulus raised hopes the worst is over.

"We see scope for further upside if economic normalization
continues, governments in major economies do not need to
reimpose lockdowns, and central bank policy remains loose,"
noted Mark Haefele, chief investment officer of Global Wealth
Management at UBS.

"But the rally does increase the importance of selectivity
within the market.

Oil majors Royal Dutch Shell, BP and Total
rose between 0.7% and 3% as crude prices climbed after
major producers agreed to extend a deal on record output cuts.

BP also got a boost as Reuters reported it would cut about
15% of its workforce in response to the coronavirus crisis.

Shares in travel and leisure stocks Carnival,
Lufthansa and CineWorld rose between 8% and
9%, topping gainers on the STOXX 600.

Danske Bank jumped 7.5% after Estonian bank LHV
agreed to buy its Estonian corporate and public
sector credit portfolio.

German card payments company Wirecard dropped 1.7%
after prosecutors opened proceedings against its entire
management board as part of a market manipulation probe.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Bernard
Orr and Mark Potter)