UPDATE 2-Telecom deals in focus as European stocks slip from highs

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* Deutsche Telekom up on unit sale, Softbank deal

* Utilities, media stocks lead morning declines

* Traders await ECB meeting on Thursday
(Adds comment, updates prices)

By Sruthi Shankar

Sept 7 (Reuters) - European stocks slipped from recent highs
on Tuesday as a flurry of deals in the telecom sector led by
Deutsche Telekom was offset by caution ahead of a European
Central Bank meeting later this week.

The pan-European STOXX 600 index slipped 0.3% after
coming close to a record high in the previous session. Utilities
, media and chemical stocks were among the
top decliners.

Spurring moves in the telecom space, Deutsche Telekom
struck a share-swap deal with Softbank Group
to increase its stake in U.S. unit T-Mobile.

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 gained more than 4%, while UK's BT
rose 2% on news Deutsche Telekom is weighing options for
its 12% stake in the company.

The wider telecoms index inched up 0.1%.

However, 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.

Luxury stocks including LVMH, Richemont,
and Kering rose more than 1%.

The world's largest inter-dealer broker TP ICAP Group
fell 7% after reporting a lower half-year profit.

Upmarket fashion retailer Ted Baker climbed 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 and Louise Heavens)