Akzo Nobel bucks falling European stock market after takeover offer

* STOXX down 0.2 percent

* Akzo climbs close to 2-year high

* Morrisons, Carrefour (LSE: 0NPH.L - news) results disappoint

* Financials outperform helped by Aviva (Other OTC: AIVAF - news)

* ECB seen keeping policy firmly on hold (Refiles to add 'on Wednesday' in para 2)

By Danilo Masoni

MILAN, March 9 (Reuters) - European shares fell on Thursday, weighed down by oil stocks and some disappointing company updates but Akzo Nobel (Amsterdam: AKZA.AS - news) soared after the paint maker rejected a 21 billion-euro bid from US rival PPG.

The STOXX 600 fell 0.2 percent, erasing gains made on Wednesday, with energy stocks being the biggest drag after crude oil prices plunged to their lowest level this year in the previous session.

Akzo Nobel rose 12 percent to its highest level in nearly two years, leading gainers on the pan-European index. The Dutch group said PPG's offer undervalued the company but added it would instead look at floating or selling its specialty chemicals business.

Jauke de Jong, analyst at AFS Group in Amsterdam, said a successful takeover by PPG was highly unlikely as he expected antitrust authorities to oppose a deal between the world's two largest paint and coating companies.

"It's unlikely that PPG will come back with an improved offer," he said. "The decision to sell its Specialty Chemicals business gives Akzo Nobel a lot of firepower to possibly be more aggressive in acquisitions itself in the currently consolidating paints and coatings industry."

News about the offer for Akzo added to a string of deal-making activity that has helped power the recent stock market rally along with strong economic data and a good earnings season.

On Thursday, however, some company updates disappointed.

Top STOXX faller was Domino's Pizza, down 11 percent after disappointing results.

It was followed by Britain's fourth biggest supermarket Morrisons, which gave a cautious outlook, and French retailer Carrefour, which reported a lower than expected operating profit.

Investors were also keeping an eye on the European Central Bank which is widely expected to keep policy unchanged at its meeting later in the day, but could sound less dovish after recent strong economic data.

AFS's De Jong said he did not expect the ECB meeting today to have a big impact on equities.

In the energy sector, Royal Dutch Shell (LSE: 0LN9.L - news) and Total (LSE: 524773.L - news) fell more than 2 percent, making them the two biggest drags in the STOXX index. Financials outperformed the broader market, helped by the likelihood of a rate hike in the U.S. next week, and by a well-received update from Aviva.

The British insurer generated forecast-beating annual profit, boosted by growth in general insurance and asset management, and said more of its growing cash pile would be handed back to shareholders in 2017.

"Overall, this was a strong beat," Bernstein analyst Edward Houghton said. (Reporting by Danilo Masoni; Editing by Toby Davis)