* STOXX reverses losses, ends 0.4 pct higher
* Renault, Smurfit Kappa rise on deal-making talk
* France's ADP up on privatisation report
* Key Trump adviser resigns (Recasts, adds quote and detail, updates prices at close)
LONDON, March 7 (Reuters) - European shares clawed back losses on Wednesday as deal-making speculation reinvigorated trading following a muted start to the session.
The pan-European STOXX 600 index ended with a gain of 0.4 percent, climbing steadily through the day and shaking off worries over the resignation of Donald Trump's economic adviser Gary Cohn, seen as a bulwark against protectionist forces within the U.S. government. Shares on Wall Street fell.
Shares in tech stocks led gainers with a 1.2 percent rise, while autos advanced 0.6 percent. Renault was the biggest auto gainer, up 5.6 percent following a Reuters report that Nissan was in talks with the car maker to buy the bulk of the French state's 15 percent Renault holding.
Also among French stocks, shares in ADP jumped 6.1 percent after a media report said the government would go ahead with plans to privatise the French airport operator and sell its 50.6 percent stake entirely.
French construction group Vinci, which has an 8 percent stake in ADP and expressed an interest in acquiring more, rose 0.4 percent.
Paper and packaging firm Smurfit Kappa saw a second session of gains, up 6.3 percent to be among the biggest gainers with traders citing a Bloomberg report that the Irish firm was prepared to open takeover talks at 40 euros per share.
This follows Smurfit Kappa's rejection of an 8 billion-euro takeover offer from U.S. peer International Paper on Tuesday.
"The psychology amongst CEOs and boards is probably 'let's start doing the deals' rather than waiting for tomorrow, so I think you'll see a pick-up in corporate activity on both sides," said Philip Dicken, head of European equities at Columbia Threadneedle Investments.
"Things are getting better, valuations are ticking up, and the cost of debt is going to be more expensive ... so suddenly you're forced into doing something and you want a piece of this action when it comes to the growth," he said, referring to CEOs.
British plane engine maker Rolls-Royce was the best STOXX index performer, surging 11.5 percent after saying it remained on track to meet its financial goals for 2020.
Analysts at UBS said that Rolls-Royce's results were "strong" and that a major milestone had been passed successfully.
Among the fallers, the advertising sector retreated after the Financial Times said P&G would cut agency spending by 1.25 billion dollars over three years. France's Publicis and Britain's WPP fell 1.9 percent and 3.9 percent respectively. (Reporting by Julien Ponthus and Kit Rees Editing by Tom Pfeiffer and Gareth Jones)