UPDATE 2-European shares rise as Syria standoff worries recede

* STOXX 600 index close up 0.7 percent

* Shire up on report Takeda seeks loans for possible bid

* M&A news also boosts Firstgroup, Snaitech

* Sulzer freed of U.S. sanctions, shares rally (Adds closing prices)

MILAN/LONDON, April 12 (Reuters) - European shares rose on Thursday alongside a relief rally across global markets after U.S. President Trump signalled that military strikes in Syria may not be imminent.

The pan-European STOXX 600 index closed up 0.7 percent after a negative start as sentiment improved during the day and Wall Street bounced higher with an easing of nerves over a confrontation between the U.S. and Russia in Syria.

"We saw global risk appetite improve markedly today, as Donald Trump stepped back from the brink on the topic of Syria", commented IG market analyst Joshua Mahony.

Trump toned down his threats of a swift military strike on Syria, tweeting "Never said when an attack on Syria would take place. Could be very soon or not so soon at all!".

Shares in Sulzer rallied 19.5 percent after the Swiss pumpmaker said it freed itself of U.S. sanctions after authorities approved its buyback of shares that has reduced to less than 50 percent the stake of Russian oligarch Viktor Vekselberg, chairman of holding company Renova.

The relief bounce however made up for only part of the 22 percent share price drop Sulzer suffered since the sanctions were announced last week, as some investors remained cautious.

"The fact that renewed sanctions could be imposed at a future point in time cannot be ruled out," Zuercher Kantonalbank analyst Armin Rechberger said in a note.

Leaving aside geopolitical concerns, merger and acquisition headlines animated the session.

Micro Focus surged 7.5 percent as traders cited a Bloomberg report that hedge fund Elliott Management had taken a stake in the UK software firm.

Firstgroup spiked 8.1 percent after news it rejected a takeover approach from Apollo, while Playtech rose 5.7 percent after it agreed to buy Italian betting firm Snaitech in a $1 billion deal. Snaitech was up 14.6 percent.

Shire rose 2.6 percent after sources told Reuters Takeda had sounded out creditors for loans to help finance a possible bid for the British rare disease specialist.

Man Group, the world's largest listed hedge fund, posted the best performance on the STOXX 600 index with an 8 percent rise after it reported strong first-quarter net inflows.

Analysts were dissapointed with France's Carrefour quarterly sales and the retailer lost 3.4 percent. (Reporting by Danilo Masoni and Julien Ponthus Editing by Matthew Mpoke Bigg)