* STOXX 600 down 0.5 pct
* Brazil-exposed stocks hit after scandal
* Berendsen rockets after Elis offer
* Earnings boost Burberry, SSP Group
(Adds details, closing prices)
By Danilo Masoni and Kit Rees
MILAN, May 18 European shares fell on Thursday,
but ended off lows as jitters over political turmoil in the
United States abated, while stocks exposed to Brazil were hit
after a scandal embroiled the country's president.
The STOXX 600 index ended down 0.5 percent at
389.19 points after falling as much as 1.2 percent earlier in
the day to its lowest in three weeks.
On Wednesday, the pan-European benchmark saw its biggest
one-day drop in eight months on worries about U.S. President
Donald Trump's ability to enact stimulus policies after reports
he may have tried to interfere with a federal investigation.
But concerns about political stability appeared to ease as
strong U.S. economic data helped Wall Street turn into positive
"Current thinking goes that the Trump trade is unwinding...
But looking at financial conditions suggests that rumours of the
Trump trade's demise have been greatly exaggerated," said
Aberdeen Asset Management Senior Investment Manager James Athey.
Stocks with exposure to Brazil such as French supermarket
group Casino and phone groups Telefonica and
Telecom Italia fell sharply as Brazilian assets were
sold off after bribery allegations against President Michel
Temer darkened the outlook for his reform plans.
Shares in Italy's Fiat Chrysler, which also is
exposed to Brazil, fell 3 percent after the U.S. Justice
Department said it was preparing to sue the carmaker over excess
diesel emissions as early as this week.
Some of the largest individual stock moves were spurred by
fresh M&A action, with shares in Berendsen soaring more
21 percent after French laundry firm Elis made a $2.6
billion offer for the British rival.
Meanwhile, shares in Swedish debt collector firm Intrum
Justitia dropped 11 percent after it proposed a string
of divestments in order to assuage European Commission concerns
over its planned merger with Norwegian rival Lindorff.
On the positive side, earnings buoyed shares in luxury goods
firm Burberry, which rose 4.7 percent after its
full-year update, while restaurant operator SSP Group
also gained after some strong first half results.
So far Europe has enjoyed a strong earnings season, with 66
percent of firms which have reported results beating analysts'
expectations, which points to earnings growth of more than 19
percent, according to Thomson Reuters I/B/E/S data.
This chimes with an overall robust reporting season for
major developed markets globally.
"Top line was particularly strong, helped by higher
commodity prices, the pick-up in inflation and the rebound in
global activity," JP Morgan's equity strategy team said in a
note, highlighting that sales grew the most in Europe.
(Reporting by Danilo Masoni; Editing by Mark Potter)