* STOXX 600 down 0.1 pct, but set for 7th week of straight gains
* Sika shares rally after Saint Gobain dispute ends
* ZPG deal prompts boosts DMGT, Rightmove shares
* ArcelorMittal results boost basic resources (Adds detail, quotes and graphic; updates prices)
LONDON, May 11 (Reuters) - European stocks traded in a narrow range on Friday but were set to seal their longest winning streak in over three years as fresh deal-making stole the spotlight from the tail-end of a busy earnings season.
The pan-European STOXX 600 index was down 0.1 percent by 0857 GMT, yet was on course for its seventh straight week of gains - its longest winning streak since March 2015. Germany's DAX declined 0.3 percent while Britain's FTSE 100 was flat in percentage terms.
Though moves at the index level were muted, M&A news livened up trading. Shares in Sika soared nearly 10 percent to the top of the STOXX after the Swiss chemicals company reached an agreement with French building materials firm Saint-Gobain to end a long-standing legal dispute.
Saint-Gobain, whose shares rose 2.7 percent, is to take a large stake in Sika, but not majority control.
"We see this as positive for (Saint Gobain), which we believe has been negatively impacted, with some investors preferring to remain on the side lines because of the uncertainties linked to the Sika operation," analysts at Raymond James said in a note.
Shares in Daily Mail and General Trust (DMGT) were last up 2.4 percent, giving up some gains after jumping as much as 9.4 percent, after U.S.-based private equity firm Silver Lake Management Company agreed to acquire ZPG, the owner of British property websites Zoopla and PrimeLocation, for 2.2 billion pounds ($3 billion).
DMGT is the biggest shareholder in ZPG, whose shares rocketed around 30 percent to a record high. Shares in fellow British classifieds websites Rightmove rose 6.2 percent and Auto Trader rallied 3.8 percent.
"A lot of companies that hold overseas money (are) looking in and realizing that they're getting a bit of value at the moment with how weak the pound is, relatively speaking," Jasper Reimers, market analyst at Vertex Capital Group, said, referring to the UK equity market.
While the first quarter earnings was winding down in Europe, basic resources was the best-performing sector after shares in ArcelorMittal rose 2.3 percent. The world's biggest steelmaker beat earnings forecasts and gave an upbeat outlook for 2018.
So far blended year-on-year earnings growth for the first quarter has come in at 16 percent for MSCI EMU, in dollar terms, compared with 26 percent for the S&P 500, according to Thomson Reuters I/B/E/S.
Health care stocks were a weak spot, however, with the sector index down 0.9 percent. Shares in AstraZeneca declined 0.1 percent after Fasenra, its first respiratory biologic medicine, flopped in a clinical trial.
(Reporting by Kit Rees, Editing by Helen Reid and Richard Balmforth)