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UPDATE 1-Retailer Casino cools talk of Amazon deal as it posts higher sales

* Shares rise, outperform broader market

* No demands from Amazon over its purchasing centre -CFO

* Q3 sales 9.2 bln euros (Adds detail, background and executive comment)

PARIS, Oct 17 (Reuters) - Supermarket retailer Casino cooled talk of a deal with Amazon, as it posted higher third quarter sales that lifted its shares.

Casino, whose credit rating was cut to junk by Standard & Poor's in March 2016 and which has been criticised by U.S. activist fund Muddy Waters, is under pressure to show it can revive profits in its French home market as conditions remain tough for its business in Brazil.

Amazon's $13.7 billion takeover of Whole Foods Market this year sparked speculation that it might be examining further tie-ups, possibly involving logistics partnerships with French supermarket operators.

However, Casino's finance director Antoine Giscard d'Estaing told reporters that such rumours were "fake news", and that Casino had not received any demands from Amazon over using its purchasing centre or regarding a logistics tie-up.

Casino, which controls Brazil's top retailer Grupo Pao de Acucar, said group third quarter sales reached 9.2 billion euros ($10.8 billion), compared with analysts' expectations for 9.119 billion euros.

Casino shares gained 1.5 percent in morning trading, among the best performers on the Paris market. The stock is up nearly 10 percent so far in 2017, outperforming a 3 percent fall on the STOXX Europe 600 retail index.

Casino's sales were up 3.4 percent on an organic basis, marking a moderate improvement from 3.3 percent growth in the second quarter, due to an improvement at its domestic stores in France such as Monoprix, Geant and its online Cdiscount unit.

Casino also reiterated its 2017 financial targets, which include expecting growth of more than 15 percent regarding food retail trading profits in France. ($1 = 0.8492 euros) (Additional reporting by Dominique Vidalon and Sudip Kar-Gupta; Editing by Keith Weir)