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European shares retreat after biggest three-day surge ever

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March 27 (Reuters) - European shares tumbled in early trading on Friday after a stunning three-day rally sparked by hopes of more aggressive stimulus to shore up the global economy ravaged by the rapid spread of the coronavirus pandemic.

The pan-European STOXX 600 index was down 1.8% at 0808 GMT, but still on course for one of its best weeks since the global financial crisis.

The benchmark index has recovered almost 17% since hitting a low on March 16, but remains more than 26% below its all-time high last month in a rout that has erased more than $3 trillion from the value of European firms.

With the pandemic still far from contained in Europe, the bloc has suspended state aid rules and limits on public borrowing and approved $40 billion worth of emergency funds to help airlines, among the hardest hit sectors in the global emergency.

After leading the rebound this week, travel and leisure stocks fell 3%. Energy stocks were down 2.9% as oil erased early gains.

French car parts company Faurecia shed 5.2% after abandoning its financial outlook due to the hit to its business from the health crisis. (Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Bernard Orr)