Renault and Fiat shares skid after $35 bln merger deal collapses

PARIS, June 6 (Reuters) - Shares in carmakers Renault and Fiat Chrysler (FCA) both fell sharply on Thursday after Fiat Chrysler abandoned its $35 billion merger offer.

Renault shares slumped 7% while Fiat's shares fell around 3% in early trading.

"With FCA pulling its merger offer, one has to wonder how much the French state is set on limiting Renaults strategic and valuation opportunities despite having only a 15% stake," analysts at brokerage Jefferies wrote in a note.

"We expect both shares to react negatively but see FCA having wider strategic options and Renault shares more downside risk near-term."

(Reporting by Sudip Kar-Gupta; editing by Jason Neely)