LIVE MARKETS-Carige move? 'Positive and timely' but Italian banks down again

* European stocks rise

* Retail sector leads gains

* In Asia, Japanese shares climb

* Eyes on Sika (IOB: 0QMA.IL - news) , Italian banks, Morrisons

* Samsung, LG (KSE: 003550.KS - news) warn on profits

Jan 8 - Welcome to the home for real-time coverage of European equity markets brought to you

by Reuters stocks reporters and anchored today by Danilo Masoni. Reach him on Messenger to share

your thoughts on market moves: danilo.masoni.thomsonreuters.com@reuters.net

CARIGE MOVE? 'POSITIVE AND TIMELY' BUT ITALIAN BANKS DOWN AGAIN (1218 GMT)

Italian banks shot up to a three-week high in early trading today following the surprise

approval of a government decree that allows troubled mid-sized lender Carige to

benefit from state-backed guarantees for funding.

Analysts are broadly welcoming the deal as a positive for the rest of the banking sector but

the rally progressively fizzled out and the sector's index is now back in the red,

down 0.4 percent.

"The government's intervention allows for a substantial and definitive stabilization of the

risks linked to Carige and demonstrates its will to protect retail savers," says Giovanni

Razzoli, analyst at Equita.

A Milan-based trader says the government's move is "positive and timely" and notes how that

removes the risks for other banks to have to inject fresh funds into the so-called FTID fund

that provides a guarantee scheme on deposits.

But why have banks eventually turned lower?

There is little immediate news out there to explain the reversal but perhaps after the

recent outperformance, some profit-taking may not be that surprising, especially as bond yields

on Italian government debt are on the rise this morning.

Another analyst notes that today's turn lower in bank stocks tracked a widening in the bond

yield spread between Italy and the safer German bund, which got closer to 270 points, as you can

see in the chart.

(Danilo Masoni)

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UNLIKE APPLE'S, SAMSUNG'S WOES LEAVE EUROPEAN TECH UNMOVED (1111 GMT)

One would think Samsung's surprise profit drop and warning about weak chip demand would have

spooked European tech stocks. But the sector is up 0.7 percent at the moment and at its

highest since Dec (Shanghai: 600875.SS - news) . 19.

That's only just slightly underperforming the STOXX 600 and quite a stark contrast with last

Thursday when Apple (NasdaqGS: AAPL - news) took the rare move of cutting its quarterly sales forecast, unleashing a

global tech selloff that sent European tech to its lowest since February 2017.

The take from traders and analysts is that with hindsight, Samsung's warning may not really

constitute a surprise and offers only a limited incremental negative.

Above all else though, the sector has already been heavily hammered. It's down 0.1 percent

for the year so far, behind only consumer staples and luxury goods stocks like Burberry

and Unilever (NYSE: UL - news) , adding to the 11 percent drop in 2018.

"Tech has already been sold hard," said Mike van Dulken from Accendo Markets, making the

case that there is little rationale for stocks in the sector to react twice to the same news,

even if conveyed a second time by Samsung.

It's been a brutal past six months - the tech sector has underperformed the STOXX 600 by 7

percent. ASML (Milan: ASML.MI - news) , which supplies both Apple and Samsung, has underperformed by 11 percent and AMS (IOB: 0QWC.IL - news) '

has been punished even more harshly.

Van Dulken adds that there probably was rotation back into the sector, which is still

technically in a bear market. Hope that China will sucessfully stimulate its economy could also

be a factor, he added.

A look at individual moves among the chipmakers today though and there is still some

bloodletting going on, with ASML down 0.9 percent. Liberum notes that Samsung is ASML's largest

customer with memory accounting for about 70 percent of its deep ultra-violet system sales last

year.

DRAM makers like Samsung will continue to cut capex this year and into 2020 to offset

shrinking profits and falling pricing, which will likely squeeze profits at ASML and other

equipment vendors through the course of this year, Liberum analysts warn this morning.

See below how European tech is in a bear market and still at the levels it was about two

years ago.

(Julien Ponthus and Josephine Mason)

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OPENING SNAPSHOT: RETAILERS AND BANKS LEAD EUROPE TO 3-WEEK HIGH (0844 GMT)

A broad rally across retail, banking and media stocks is driving gains across Europe this

morning. The STOXX 600 index is up 0.6 percent at its highest since Dec. 17 in early deals.

The retail sector is the best performer, up 1.3 percent, with Carrefour (LSE: 0NPH.L - news) leading

Paris' CAC 40 after a BAML upgrade and clothes retailer Next (Frankfurt: 779551 - news) topping London's FTSE 100.

Morrisons isn't faring so well after its disappointing Christmas trading update.

Construction and materials stocks are also lagging the broader market after a warning from

UK building materials supplier SIG (Frankfurt: 888153 - news) that sluggish markets in the UK, France and Germany have hurt

revenue. FTSE midcap SIG is down 4.8 percent.

Otherwise, broker moves are driving some of the biggest moves: Rotork (Frankfurt: RO41.F - news) is leading the pan

European index after Goldman upgraded the stock and Smiths Group (Frankfurt: QS2A.F - news) is down 2 percent on the FTSE

after a downgrade in a note on the capital goods sector. Signify was cut by BAML and is bottom

of the STOXX 600 pack and Kion, downgraded by Goldman, has fallen 5 percent.

In France, Bouygues (LSE: 0HAN.L - news) is down 2 percent after Credit Suisse (IOB: 0QP5.IL - news) lower its rating on the stock and

in Italy Prysmian is leading the Milan blue chips after a Goldman upgrade.

(Josephine Mason)

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HEADLINES ROUNDUP: EYES ON SIKA, ITALIAN BANKS, MORRISONS (0728 GMT)

Turning to the corporate front, eyes will be on Sika after the Swiss chemicals

company offered to buy smaller French rival Parex for an enterprise value of 2.5 billion Swiss

francs, while Italian banks could be on the watchlist too after the Italian government approved

a decree aimed at shoring up troubled lender Banca Carige (Dusseldorf: -BJ51.DU - news) .

In the UK, Morrisons kicked off a big week for retailers with a disappointing

update. The country's fourth largest supermarket group missed forecasts as its sales growth

slowed in both its retail and wholesale businesses over the key Christmas period.

There was bad news from South Korean consumer electronics giants overnight, which may add

further sting to fears about a global tech slowdown following Apple's shock warning last week

and could hit chipmakers again.

LG Electronics (KSE: 066570.KS - news) , the world's second-biggest television set maker, warned on Q4 profits and

Samsung blamed low chip demand for a shock profits warning.

Meanwhile, stock index futures have opened up slightly, confirming earlier indications from

spreadbetters. Data showing that German industrial output unexpectedly fell in November for the

third consecutive month did not have an immediate impact on DAX futures, last up 0.3 percent.

Here's your headlines round up:

Sika offers to buy French firm Parex for enterprise value of $2.6 bln

Italy offers state-backed options to shore up Carige

Sales growth at UK's Morrisons slows in Christmas period

Dassault business jet deliveries down, Rafale higher

Nissan's Ghosn claims innocence in first appearance since November arrest

STMicroelectronics (LSE: 0INB.L - news) and Cree (NasdaqGS: CREE - news) sign multi-year silicon carbide wafer supply deal

French car parts manufacturer Valeo (LSE: 0RH5.L - news) plans more cuts - FT

BASF workers in Taiwan (Taiwan OTC: 6549.TWO - news) suspected of leaking company secrets

Daimler (IOB: 0NXX.IL - news) to invest $573 mln in autonomous trucks

Nvidia (Swiss: NVDA.SW - news) says new self-driving platform to hit streets next year

(Danilo Masoni)

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MORNING CALL: EUROPEAN SHARES SEEN UP SLIGHTLY (0633 GMT)

European shares are expected to recover the slight losses seen in the previous session, as

hopes of a possible Sino (Dusseldorf: 1205802.DU - news) -U.S. trade deal help offset persistent worries over global growth with

Samsung Electronics positing a below-consensus fourth-quarter profit as a slowing

Chinese market takes its toll.

Spreadbetters at IG (Frankfurt: A0EARV - news) expect London's FTSE to open 19 points higher at 6,830, Frankfurt's DAX

to open 33 points higher at 10,781 and Paris' CAC to open 16 points higher at 4,735.

Over in Asia, trade optimism helped prop up some shares with Japan's Nikkei last up 0.8

percent, although losses in China dragged MSCI (Frankfurt: 3HM.F - news) 's broadest index of Asia-Pacific shares outside

Japan down 0.2 percent.

(Danilo Masoni)

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