BUZZ-European stocks and China: telecoms and UK property the likely outperformers

** Domestically focused defensive names most likely stocks to outperform if devaluation of the Chinese yuan continues to hit European equities

** All sectors on Stoxx 600 in the red on Wednesday, with autos, and luxury and miners leading the fallers for a second day

** Defensive sectors also weaker but outperform the index; traders say falls could be an opportunity to pick up names likely to be relatively strong in a risk-off market

** Citi highlights UK property stocks as likely beneficiaries from any capital flight from China, as well as being helped by the BoE delaying a rate hike should China continue to export deflation

** On an index level, Stoxx 600 Telecoms sector looking to break out against the Stoxx 600 - benefits from a greater domestic focus along with additional support from potential M&A. Chart: http://link.reuters.com/xef45w

** Utilities, the other sector outperforming on the day, less likely to show leadership given its relatively weaker outlook (second worst sector YTD)

** Italy v Germany pair trade - a proxy on domestic v exporting businesses - also making 10 month highs on a relative basis Chart: http://link.reuters.com/kuv44w (RM (LSE: RM.L - news) : alasdair.pal.thomsonreuters.com@reuters.net)