* STOXX 600 down 0.2 pct, DAX down 0.8 pct
* Chinese takeover approach drives Amer Sports up 19 pct
* Ashtead, Partners Group gain after results (Updates prices, adds details, quotes)
By Danilo Masoni and Helen Reid
MILAN/LONDON, Sept 11 (Reuters) - A recovery in European shares stalled on Tuesday as a trade dispute between Washington and Beijing weighed on the market and investors seized on China's demand for sanctions from the World Trade Organisation as a reason to take the market lower.
The STOXX 600 .STOXX turned down after a positive open, down 0.2 percent by the close, as trade-sensitive autos and mining stocks buckled under pressure from rising tensions between the U.S. and China.
China told the WTO it wanted to impose $7 billion a year in sanctions on the U.S. in retaliation for Washington's non-compliance with a ruling in a dispute, initiated in 2013, over U.S. dumping duties. the dispute being unrelated to the most recent trade conflict, trade-sensitive stocks fell further on the news, showing how sensitive the market is to any suggestion that U.S.-China relations are souring further.
The pan-European index was still up 0.9 percent from the five-month lows hit last week.
U.S. President Donald Trump said last week he was ready to slap tariffs on virtually all Chinese imports into the United States, threatening duties on another $267 billion of goods on top of $200 billion in imports primed for levies in coming days.
Among single stocks, Amer Sports AMEAS.HE shone after a takeover approach sent the Finnish sports equipment maker soaring up 18.8 percent.
Trading in its shares was halted before Amer said it had received a 4.6 billion euros ($5.3 billion) takeover approach from China's Anta Sports Products and private equity firm FountainVest. game developer Ubisoft UBIP.PA was another strong gainer, up 4.3 percent after JP Morgan analysts upgraded the stock to "overweight" from "neutral", saying secular growth in the gaming industry and the shift to digital would drive margins up.
"Ubisoft has a strong portfolio of established franchises with recurring revenues," they wrote.
"We see further potential upside from China, mobile market growth and share gains from a low base and a longer-term shift to cloud-based services and subscription bundles."
Solid updates pushed industrial equipment rental firm Ashtead AHT.L and asset manager Partners Group PGHN.S up 2.6 and 3.8 percent respectively. Swiss asset manager reported strong first-half results, with revenues and earnings up more than expected.
Partners Group fared better than troubled peer GAM GAMH.S , which fell 4 percent.
Semiconductor stocks fell after Japan's Renesas sealed a deal to buy auto chipmaker IDT IDT.N for $6.7 billion, with some analysts saying the deal was symptomatic of a top in the chipmakers industry.
"A quick look at recent history of M&A in the sector (Microchip's disastrous acquisition of Microsemi) and the risk that the semiconductor industry is reaching a cyclical peak is cause for concern," said Neil Campling, co-head of the global thematic group at Mirabaud Securities.
A drop in the U.S. semiconductor stocks index .SOX amplified the fall in European chipmakers Siltronic WAFGn.DE , BE Semiconductor BESI.AS , AMS AMS.S , ASM International ASMI.AS , Infineon IFXGn.DE - all down between 1.9 and 4.4 percent.
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