LIVE MARKETS-Autos: Q1 hill comes into view

* European shares rise as risk appetite returns

* Sterling hits highest since Brexit vote

* U.S. stocks futures climb

April 17 - Welcome to the home for real-time coverage of European equity markets brought to

you by Reuters stocks reporters and anchored today by Julien Ponthus. Reach him on Messenger to

share your thoughts on market moves: julien.ponthus.thomsonreuters.com@reuters.net

AUTOS: Q1 HILL COMES INTO VIEW (1319 GMT)

Talking about areas of the market which are seeing momentum, European autos are the

best-performing European sector so far this year, up nearly 4 percent and building on 2017's 13

percent gain.

But can the wheels keep turning? Analysts at Morgan Stanley think so.

"We don't see anything material enough into Q1 to upset the prevailing momentum, which is

seeing Volkswagen, Peugeot and Faurecia outperform," Morgan Stanley's analysts say in a note.

But this comes with a caveat - MS don't see further upgrades as likely, so they would "fade

any strength on the numbers".

So it's going to be important for auto stocks to deliver on earnings, with MS warning that

if they don't, then "shares may falter". MS say that they continue to avoid legacy auto assets

and prefer tyremakers such as Continental and Pirelli, and car rental stocks, such as Europcar.

(Kit Rees)

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WILL ITALIAN STOCKS KEEP GOING? (1133 GMT)

Political uncertainty is not affecting Italian stocks which continue to do better than peers

in this turbulent start of the year following a stellar 2017. But what drove past gains and more

importantly are they sustainable?

We've put these questions to Matteo Ramenghi, Chief Investment Officer at UBS WM Italy, who

believes company updates and developments in Rome are key now that the country's relative

valuations are no longer that cheap.

"We must look at earnings updates and what happens at the political level. Going forward we

are tied to the newsflow," says Ramenghi, adding that UBS WM has a neutral view on the country's

equities.

"The good performance has not been driven by investors rushing to buy the Italian market as

a whole but rather by stock pickers lured by bottom-up factors from bank restructurings to

extraordinary operations in the industrial sector," he says.

On top of that Italian stocks were priced at an important discount compared to the rest of

Europe and last year the economy grew by 1.5 percent, nearly twice as much initial forecasts,

filtering through year-end 2017 company results.

But now? "Probably we've already seen much of the impact of the discount effect and the

strong 2017 balance sheet," he says.

Hence the focus on earnings and politics.

Meanwhile today, Italian banks are rising strongly, up 1.8 percent, after Intesa

Sanpaolo sold a bad loan portfolio on better than expected terms, fuelling expectations

other banks could also sell soured debt at favourable prices, further cleaning their balance

sheets and potentially helping them lend more.

(Danilo Masoni)

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MIDDAY SNAPSHOT: STOXX IS UP AND AWAY (1105 GMT)

European shares have been climbing steadily through the first half of the session and now

almost every sector is in positive territory, except for travel & leisure and personal &

household goods.

It's also looking like Wall Street is going to see a firm start to the day's trading with

U.S. stocks futures up around 0.5 percent.

Here's your midday snapshot:

(Kit Rees)

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UBS' FANTASTIC CAPEX FOUR (1028 GMT)

While breakups and makeups have been a big theme for European equities this year, a pick-up

in capex is also on investors' radars.

Following on from a survey of around 600 Eurozone corporates and their capex intentions, UBS

strategists have identified four stocks in particular to play this theme: Wartsila, Arkema,

Aveva and ISS.

UBS analysts point to a rise in shipyard orders for Finnish marine technology firm Wartsila

over the past 12 months plus growing demand from renewable energy also benefiting the

firm, while commodity earnings staying close to current levels for longer than expected and

specialty chemicals are seen helping France's Arkema.

UBS' stock picks also include those which are more tech-facing, as companies are expected to

increase spending on digitisation. That's where UBS' choice of Aveva comes in, which

they say is a potential play on the Internet of Things theme as well as being a beneficiary of

the marine cycle.

UBS expect Denmark's ISS, an outsourcer, to see a boost from its "leading position

in facilities management digitalisation".

(Kit Rees)

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WHY M&A SPECULATION ON FRENCH TELCOS STICKS (1011 GMT)

Some rumours simply won't go away, especially when so many investors wish they were true!

France's telecoms sector has been the centre of M&A speculation for years amid failed attempts

to reduce the number of players from four to three, the latest (official) one being in 2016.

Bouygues poured cold water on the latest rumour, but the buzz isn't going away:

Altice is up 1.8 percent this morning after closing up 5.4 percent on Monday. Buy-side analysts

have had their eyes on the sector for a while and some of them have already placed their bets.

"For me consolidation is necessary and should happen in 2018," Estelle Ménard, who manages

the Europe Special situation fund at CPR AM, told us as early as October.

The origin of M&A rumours can be traced back to the price war following the arrival in 2012

of low-cost operator Free, which had investors (though not consumers of course) pleading for a

way to ease competition and stop EBITDA from bleeding further.

And that's the point: while sell-side analysts can't give their clients any certainties on

if, when and how the sector will concentrate, they do have a clear conviction: it makes sense.

"We see a strong rationale for French four to three mobile consolidation, given potential

for regulatory support as well as much needed market repair," Barclays said in a note where it

described concentration in France as "plausible".

Goldman Sachs analysts took "no view on the likelihood of any transaction," but wrote that

"consolidation in French telecoms could be a material positive for all operators in the market,

namely Altice, Bouygues, Iliad and Orange."

Despite the fact defensives shares are becoming more popular among equity strategists

worried about a downturn, the sector is a clear underperformer with a 4.4 percent fall

year-to-date while the STOXX 600 is down only 2.6 percent.

As a trader put it a few weeks ago, M&A speculation, be it national or cross-border, is key

to keeping investors' interest alive as one can see this morning through Vivendi's standoff with

Elliott Advisors over Telecom Italia.

"Without M&A the sector sucks".

Here's what the French market looks like, from Goldman's note:

(Julien Ponthus)

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OPENING SNAPSHOT: EUROPEAN STOCKS PROGRESS AS FOCUS TURNS TO EARNINGS (0719 GMT)

It's a stronger open for Europe today with gains across benchmarks, though the FTSE 100 is

lagging its peers on the continent, which could be partly down to sterling climbing to its

highest level since the Brexit vote.

Financials and materials are leading the charge on the STOXX as risk appetite returns with a

renewed focus on corporate earnings.

Top of the charts today is Intrum Justitia, up 12 percent after bidding for $13

billion of Intesa Sanpaolo's bad debts. The Italian bank itself is up just 0.7 percent.

Bayer leads the DAX, up 2.1 percent after selling a 3.6 percent stake to

Singapore's state investment company Temasek.

Polymetal International, which was hit by Russia fears yesterday, is recovering to

trade up 4 percent, while ABF is up 3.6 percent after results.

Some big movers in UK mid-caps too: emerging markets asset manager Ashmore is up

6.8 percent at the top of the FTSE 250 after its results, while strong earnings, driven by

demand for trainers and track pants, are boosting JD Sports shares up 6.5 percent.

(Helen Reid)

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WHAT'S ON OUR RADAR BEFORE THE OPEN (0640 GMT)

European stocks are set to open in positive territory on Tuesday and to catch up somewhat

with Wall Street and Asia after a weak session on Monday.

Sentiment is back to risk-on even if caution is still warranted due to the ongoing tensions

in the geopolitical arena with the aftermath of the U.S. missile strike on Syria and tensions

still high with Russia.

On the macro front, there’s likely to be more "peak growth" for the Euro zone headlines with

Germany ZEW Economic Sentiment expected lower for April.

No major corporate news but AGM season is here and there could be a few interesting ones

such as France’s Vinci and L'Oreal, Italy’s Assicurazioni Generali or TomTom in the

Netherlands which also released Q1 above estimate.

On the earning’s front French supermarket retailer Casino posted a 3.1 percent

rise in first-quarter sales on Tuesday that reflected stronger sales at its Geant Casino

hypermarkets and a resilient performance in Brazil despite food inflation.

In the UK, Associated British Foods reported a 1 percent fall in first-half profit,

with a resilient performance at its Primark fashion business offset by a previously flagged

reduction in sugar revenues.

Swiss construction chemicals group Sika reported first-quarter sales slightly above

expectations.

On the M&A front, Lagardere, the French media group whose assets include Paris

Match magazine and Europe 1 radio is selling some eastern European radio assets to Czech Media

Invest.

Italy's Atlantia said on Monday it would sell a 29.9 percent stake in Spanish

telecoms mast group Cellnex to Edizione, which is the Benetton family holding company and also

its controlling shareholder.

In a headline which might reassure investors further that NPLs are no longer a bogeyman the

Italian banking sector, Sweden's Intrum Justitia has filed a binding bid for Intesa

Sanpaolo's debt collection unit in a 3.6 billion euro deal that rids the Italian bank

of 10.8 billion euros in bad debts.

In the UK, Gatemore Capital Management has built a stake in Wincanton and called on

the British logistics company to break itself up by selling one of its two divisions, according

to a letter sent by Gatemore to its own investors.

Here are some of the main headlines on our radar:

Intesa to shed $13 bln in bad debts with Intrum deal

Singapore's Temasek hikes Bayer stake in $3.7 bln share sale

Navigation firm TomTom posts higher Q1 core earnings, beats estimate

France's Lagardere sells eastern European radio assets to Czech Media Invest

Primark-owner AB Foods' first-half profit held back by sugar

Alexandre de Rothschild to take over at helm of Rothschild bank

Retailer Casino's Q1 sales rise as French hypermarkets improve

Swiss group Sika Q1 sales scrape past estimates amid Saint-Gobain battle

Trump administration delays new sanctions on Russia -official

UK's JD Sports profit surges on demand for trainers, track pants

(Julien Ponthus)

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EUROPE SET TO CATCH UP WITH WALL STREET, ASIA (0607 GMT)

Futures are trading up, confirming earlier indications from financial spreadbetters that

European bourses are set to somewhat catch up with Wall Street and Asia after Monday's weak

session.

Here's how it's looking at the moment:

(Julien Ponthus)

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MORNING CALL: EUROPEAN BOURSES SEEN RISING AT THE OPEN (0524 GMT)

European bourses missed out last session, losing some ground to Wall Street and Asia where

the mood was more optimistic thanks notably to data showing China's economy grew a little faster

than expected.

Some catching appears in order.

According to CMC Markets, the London's FTSE 100 is expected to open 12 points higher at

7,210 points, Germany's DAX 42 points higher at 12,453 points and Paris' CAC 40 17 points higher

at 5,330 points.

(Julien Ponthus)

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