UPDATE 2-European shares hand back gains after White House dampens Sino-U.S. trade optimism

* White House says no agreements done ahead of trade talks
* DAX outperforms most bourses
* Bayer soars after Elliot reveals stake
* H&M shines on summer collection sales

(Updates to close)
By Susan Mathew
June 27 (Reuters) - European shares handed back gains to
close flat on Thursday after comments from the White House undid
optimism over a potential Sino-U.S. trade deal, while a strong
rally in shares of chemicals giant Bayer propped up German
equities.
The pan-European STOXX 600 index .STOXX rose as much as
0.4% earlier in the day, spurred by signs overnight of progress
between Washington and Beijing in resolving their trade dispute
that has roiled markets for the past year.
However, White house adviser Larry Kudlow said on Thursday
no specific agreements had been made ahead of talks between U.S.
President Donald Trump and his Chinese counterpart Xi Jinping
this weekend and Washington was still insisting on structural
changes on intellectual property and enforcement mechanisms.
Another Trump administration official also told Reuters that
lifting sanctions on Chinese telecom equipment maker Huawei
Technologies seemed unlikely. Analysts warned against excessive optimism.
"China is unlikely to make more concessions than they have
already made and certainly they will not make the type of
concessions that Trump is expecting and eventually the trade war
will resume," said Simona Gambarini, a markets economist at
Capital Economics in London said before the White House
comments.
Losses were led by the real estate .SX86P and energy
.SXEP sectors, down 1.1% and 0.8% respectively.
While most major country indexes in the region closed flat
to lower, Germany's trade-sensitive DAX .GDAXI outperformed,
up 0.2%, boosted by Bayer's 8.7% rally.
Bayer BAYGn.DE surged after the group hired a lawyer and
formed a committee to address glyphosate litigation, and as
activist shareholder Elliott Associates said it had built up a
1.1 billion euros stake in the company and considered the stock
undervalued. The biggest gainer on the STOXX 600 index was H&M HMb.ST ,
up 13.7% after the Swedish fashion retailer said sales of its
summer collections had gotten off to a good start and that it
was selling more clothes at full price. Its upbeat tone drove a 2.2% rise in the retail sector.
On the flip side, Chr Hansen CHRH.CO tumbled 13.8% after
the Danish food ingredients maker cut its revenue outlook for
the year, hit by a disappointing performance at its food
colouring and animal health businesses in the latest quarter.