EADS shares rise, BAE Systems falls on report deal talks collapse

LONDON, Oct 9 (Reuters) - Shares in EADS rose sharply and those in BAE Systems fell on Tuesday, with three traders attributing the move to a report by German news agency DPA that merger talks between the two companies had collapsed.

The DPA report cited sources close to the negotiations.

A source close to EADS told Reuters that the DPA report was wrong.

EADS shares rose as high as 26.85 euros a share before ceding most of their gains to trade up 0.2 percent on the day at 26.30 euros by 1143 GMT. Shares in BAE, meanwhile, were down 1 percent at 323.1 pence, off their earlier low of 320.9 pence.

(Reporting by London markets team)

((simon.jessop@thomsonreuters.com; +44 (0) 207 542 5052; Reuters Messaging: Reuters Messaging: simon.jessop.thomsonreuters.com@reuters.net))