UPDATE 2-M&A rush, strong earnings see European stocks close at new highs

* Meggitt hits record high on Parker-Hannifin deal

* HSBC, AXA rise after results

* Allianz slides on U.S. probe
(Updates to market close)

By Sruthi Shankar and Ambar Warrick

Aug 2 (Reuters) - European stocks ended at a new peak on
Monday, as increased dealmaking activity and a batch of strong
financial sector earnings helped markets mark a strong start to
August.

The pan-European STOXX 600 index rose 0.6% to end
at a record closing high of 464.45 points, with retail
and technology stocks serving as the best performers.

British aero-engineer Meggitt soared 56.7% to the
top of the STOXX 600, hitting a record high after U.S.
industrial firm Parker-Hannifin said it would buy the UK
rival in a deal valued at $8.76 billion.

Among other deals, British asset management services
provider Sanne Group jumped 7.6% after it said it could
get a takeover bid from fund servicer Apex Group.

German real estate firm Vonovia rose 2.2% as it
launched a sweetened, 19.1 billion euro ($22.7 billion) bid to
buy rival Deutsche Wohnen.

Axa, Europe's second-largest insurer, gained 4.2%
after it posted a 180% surge in first-half net income.

German rival Allianz tumbled 7.8% after U.S.
regulators started a probe relating to Allianz Global Investors'
Structured Alpha Funds.

Asia-focussed lender HSBC edged 0.3% lower, even
after it beat forecasts for first-half pretax profit and
reinstated dividend payments.

Of the more than half of the STOXX 600 companies that have
reported second-quarter results so far, 67% have topped profit
estimates, as per Refinitiv IBES data.

"Having reached all-time highs post 1Q results, the breadth
of positive EPS revisions in Europe remains very strong both in
absolute terms and versus peers," European equity strategists at
Morgan Stanley said in a note. "Europe now sees the best
earnings revisions of all global regions."

Optimism around European earnings and economic reopening
helped the benchmark STOXX 600 end July with a sixth straight
month of gains despite concerns about inflation, soaring virus
cases in Asia and a major regulatory crackdown in China.

Meanwhile, a survey showed manufacturing activity across the
euro zone continued to expand at a blistering pace in July, but
supply bottlenecks sent input costs soaring.

British jet and auto parts supplier Senior Plc
jumped 9.3% after it reported a first-half profit compared with
a loss a year earlier.

Peer Melrose gained 5.2%, while Rolls-Royce
added 3.8% .

The world's second-largest brewer Heineken inched
up 0.6% after reporting first-half earnings above expectations,
but warned rising commodity costs would eat into margins.

German carmaker Daimler rose 1.5% after Goldman
Sachs added the stock to its conviction list.
($1 = 0.8415 euros)

(Reporting by Sruthi Shankar and Ambar Warrick in Bengaluru;
Editing by Sriraj Kalluvila and Richard Chang)