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Feb 5 ( ) - Welcome to the home for real time coverage of European equity markets brought
to you by Reuters stocks reporters and anchored today by Helen Reid. Reach her on
Messenger to share your thoughts on market moves:
helen.reid.thomsonreuters.com@reuters.net WHAT'S ON THE RADAR FOR THE
EUROPEAN OPEN (0751 GMT) A sharp sell-off in Asian trading is set to spread to Europe
on Monday with stock futures down 0.7 to 1 percent as rising bond yields continue to take
their toll on stock markets near record highs. Euro area PMIs at 0900 GMT will give a read
on whether the region is keeping up its blistering pace of growth, but SocGen analysts
warned a strong reading could spell further turbulence for stocks if it drives yields higher. On
a slightly calmer day for earnings, notable companies reporting include budget airline
Ryanair, engineering group Sandvik and miner Randgold Resources. Ryanair shares are
indicated down 2 to 3 percent in pre-market after the company struck a cautious tone on
fares, while Sandvik is seen gaining 2 percent at the open after fourth-quarter profit topped
forecasts. Fiat Chrysler shares are also seen down 3 to 5 percent after sources said the
U.S. Justice Department is seeking 'substantial' fines in the emissions case. Fiat's U.S.
shares ended down 7.2 percent on Friday. (Helen Reid) ***** EARLY MORNING
EUROPEAN HEADLINE ROUND-UP (0740 GMT) There are some earnings updates to
focus on today including from Ryanair, Sandvik and Randgold. Below a summary of the
headlines we're looking at: Lloyds Bank to ban credit card owners from buying
cryptocurrencies Ryanair CEO warns of strikes, says some pilot demands 'laughable'
Lufthansa aims to replace top management at Brussels Airlines Merck's consumer health
sale at risk as Nestle bows out - sources Infineon CEO sees no spin-offs, IPOs for units -
Euro am Sonntag Italian shipbuilder Fincantieri takes control of STX France Activist investor
Elliott sheds most of Dufry stake MEDIA-iPhone X owners report problems with incoming
calls- FT Heathrow terminals should be opened up to competition says IAG Broadcom to
raise Qualcomm bid in push for talks, sources say Daily Mirror owner to clinch takeover of
rival titles this week -Sky Engie board puts four candidates forward for chairman role -report
Daimler, Bosch to test self-driving cars soon - Automobilwoche Schaeffler has e-mobility
orders worth $1.25 bln -Automobilwoche MEDIA-SAP sees good chance for 30 pct margin
in 2019 -Euro am Sonntag Fitch: Unilever's Strong 2017 Results Do Not Rule Out
Downgrade Tesco says Booker's Wilson to be UK and Ireland boss after takeover
Engineering group Sandvik Q4 operating profit tops forecast VW seeks delay in U.S. trial
after lawyer references monkey testing, EXCLUSIVE-Merck's consumer health sale at risk
as Nestle bows out - sources Randgold 2017 profit up 14 pct, doubles dividend BRIEFlastminute.com
Expects For 2017 Net Loss Of EUR 8-9 Mln German coalition negotiators
may drop proposal to abolish air transport tax ANALYSIS-Deutsche Bank gambles German
goodwill with bonus bonanza (Tom Pfeiffer and Danilo Masoni) ***** FUTURES POINT TO
SHARP SELL-OFF IN EUROPEAN STOCKS AS YIELDS RISE (0721 GMT) Futures have
opened sharply lower across the main benchmarks, with drops of 0.7 to 1.1 percent.
Meanwhile Germany's 10-year government bond yield has risen to its highest level since
September 2015 - so the yield pressure looks like it's here to stay today as well. (Helen
Reid) ***** EURO AREA PMIS COULD PUSH YIELDS HIGHER (0653 GMT) Euro area
PMIs today at 0900 GMT will provide a read on growth in the region, but economists at
Societe Generale reckon stocks may not take the data well even if it points to strong activity.
"These have the potential to maintain upward pressure on yields if they suggest strong
underlying growth momentum. Strong growth will provide little solace for equities or
commodities if it pushes bond yields higher," write SocGen analysts. They add that the selloff
in bonds has been more aggressive than they had anticipated. The past week was "a
tough one for asset markets" and this one could be more of the same. (Helen Reid) *****
"EXTREMELY WELCOME NEWS FOR ACTIVE" (0638 GMT) Bernstein's global
quantitative analysis team finds a pick-up in performance for active managers and signs
they could continue to do well this year, a godsend after years of disappointing returns for
the industry. European portfolio managers and global quantitative managers beat
benchmarks by 3.3% and 1.9% on average in 2017, Bernstein finds, and this strong
performance has continued into 2018. Stock and factor correlations at multiyear lows create
optimal conditions for active management and stock picking. "Even if are unlikely to go
lower from here, the current levels suggest a rich opportunity set for stock pickers for the
next 12 months," write Alla Harmsworth and team. Intra-sector correlations are at 20-year
lows on both sides of the Atlantic, and valuation spreads are wider than usual across the
whole market and within sectors, they note. "This suggests a heightened potential ability to
identify idiosyncratic 'winners' even amongst peers within narrow market segments," says
Harmsworth. It'll be interesting to see whether this low correlation environment continues
even if the stocks rally starts to peter out. (Helen Reid) ***** MORNING CALL: SELL-OFF
TO SPREAD TO EUROPE (0618 GMT) Good morning and welcome to Live Markets.
European stocks are in for a turbulent start to the week after a sharp sell-off in Asian shares
overnight, with fears of resurgent inflation taking their toll on markets near record high
levels. Asian shares fell the most in more than a year, tracking a much weaker Wall Street
session after Friday's U.S. payrolls report showed wages growing at their fastest pace in
more than 8 years. Spreadbetters call the DAX 153 points lower at 12,632.4, the CAC 40
down 64 points at 5,300.7, and the FTSE down 79 points at 7,364. (Helen Reid) *****
(Reporting by Danilo Masoni, Helen Reid, Kit Rees and Julien Ponthus)