LIVE MARKETS-Closing snapshot: European shares tick lower on trade tremors

* European stocks lower

* Banks lead losers, weighed by Deutsche Bank drop

* U.S. Fed policy statement due 1800 GMT

LONDON, March 21 (Reuters) - Welcome to the home for real-time coverage of European equity

markets brought to you by Reuters stocks reporters and anchored today by Kit Rees. Reach her on

Messenger to share your thoughts on market moves: rm://kit.rees.thomsonreuters.com@reuters.net

CLOSING SNAPSHOT: EUROPEAN SHARES TICK LOWER ON TRADE TREMORS (1709 GMT)

European shares suffered a small setback today, ending down 0.2 percent as trade worries

returned with a report that China was planning counter-measures against U.S. tariffs.

As one trader put it earlier, "The market is too focused on Fed and not enough on trade

conflicts. Every day the climate for trade is getting worse."

Banks have also been a dampener today with Deutsche Bank's 5 percent drop the single biggest

weight on the market.

Meanwhile the FTSE 100 hit a new 15-month low as more sharp share drops hit Kingfisher

(-10.7 percent) and small-cap Moss Bros suffered a 23 percent fall after a profit warning.

While UK retail is given a wide berth by most, some contrarian investors are holding on to

even the most risky stocks the sector has to offer.

Have a good evening and see you tomorrow!

(Helen Reid)

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A RARE PHENOMENON IN VOLATILITY MARKETS (1530 GMT)

S&P 500 implied volatility is staying higher than Euro Stoxx volatility for

the first time in years - a shift which speaks of a longer-term impact from February's massive

spike in the VIX.

"This phenomenon is quite rare, and is likely to be a function of some lingering nuances in

the VIX market in the wake of the volatility spike we saw recently - exacerbated by U.S.

technical factors with little spillover to non-U.S. equity," wrote Goldman Sachs analysts.

Typically European stock volatility - as measured by the implied volatility of the Euro

Stoxx 50 - is higher than the VIX.

Interestingly, JP Morgan has just given Cboe, the company that provides VIX

futures, its first "sell" rating. Analysts at the bank argue VIX futures activity is likely to

slow further.

BNP Paribas cross-asset strategists, however, see volatility being driven up in the next

months, and unlikely to come back to its lows, with vol sellers more cautious following

February's spike.

(Helen Reid)

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WHY CAN'T EUROPEAN BANKS FLY? (1454 GMT)

Banks are the biggest losers in Europe today and this may just add to the frustration of

those betting earlier this year that the improving economy, the fading political and regulatory

risks and prospects for M&A would give a big boost to the cheaply valued sector.

Now that the first quarter is about to end it looks clear that this bet hasn't paid off as

hoped. Why is that?

"Clearly the macro is getting better, and it is only the trajectory of the recovery which is

potentially less steep. But banks are a macro trade and if the macro is less good than expected,

it creates a tough tape," argues Mediobanca Securities in a note for clients. "We need to see

the data find a pulse again, else we are going to get another leg down."

To understand the link between banks and macro beats, look at this chart showing how the

euro zone bank index has struggled since Citi's economic surprise index

started to soften in January before turning negative at the end of February for the first time

in a year and a half.

Euro zone banks meanwhile have just hit a fresh 6-month low, down 1.4 percent, also weighed

down by a fresh drop in Deutsche Bank shares, about which you can find out more here.

(Danilo Masoni)

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MIDDAY SNAPSHOT: STOXX AT FRESH LOW ON CHINA'S TRADE HIT-BACK REPORT (1217 GMT)

A report by the Wall Street Journal saying China is planning countermeasures against U.S.

tariffs has suddenly livened up sleepy markets which were cautiously awaiting this afternoon's

Federal Reserve policy meeting. The report https://goo.gl/dPFgWb fuelled some risk-off moves

across the board, also driving the Yen up against the dollar. In a few minutes the STOXX 600

has turned lower to hit a fresh day's low.

(Danilo Masoni)

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EUROPE'S INSURERS SEEN HAVING $150 BLN M&A FIREPOWER (1031 GMT)

This eye-catching estimate is from UBS analysts led by Arjan van Veen who have looked into

prospects for continued dealmaking in the sector following an acceleration at the start of the

year, driven by strong balance sheets and limited organic growth.

They say this trend is set to continue over the medium term but warn investors to closely

monitor possible developments given the mixed reception to the deal announced in 2018.

"We expect surplus capital deployment (buy-backs or M&A) will drive performance in 2018 and

beyond, especially for insurers with strong track records of deploying capital that create

value," they say in a note.

"The market is cautious on large M&A transactions and highlights the importance of

delivering on a company's strategy with limited deviation to M&A guidance," they say, recalling

the negative share price reaction to AXA's acquisition of XL Group which they

believe was partly driven by a significant deviation from stated M&A policy of bolt-on deals.

Prudential's demerger of its UK business was welcomed by the market, as was AIG's

acquisition of Validus.

In the snapshot you can see potential M&A firepower insurer by insurer. Top three positions

are held by Allianz, Generali and Munich Re, each seen having

more than $20 billion in M&A firepower, assuming maximum leverage.

(Danilo Masoni)

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EARLY SNAPSHOT: EUROPEAN SHARES TURN NEGATIVE

Trade is muted ahead of the conclusion of the Fed meeting. A BOE rate decision tomorrow

gives investors a further reason to sit on their hands.

More drama on the UK high street, with Moss Bros shedding a third of its value after a

profit warning that one analyst blamed on a problem with stock availability rather than the rise

of e-commerce. And there is heavy selling of Kingfisher, the DIY chain owner, after it warned of

a "more uncertain" outlook for the UK market - so not a good day for the many analysts who had

positive ratings on the stock.

Here's your opening snapshot:

(Kit Rees)

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WHAT WE'RE WATCHING AHEAD OF THE OPEN (0747 GMT)

Trading will be cautious ahead of the US Fed policy statement later this evening, with

European stock futures trading slightly higher.

Hermes, which makes $10,000-plus Birkin handbags, saw its margins hit a record in 2017,

while interestingly Kingfisher beat forecasts on the back of growth at Screwfix – home

improvement stores still seem to be holding their own against online retail.

Facebook’s shares saw a further slide on Tuesday as it faces questions from U.S. and

European lawmakers over reports of data misuse, and sentiment around tech firms continues to

sour.

Latest company news headlines:

French luxury group Hermes says margins hit record 34.6 pct

Airbus to name new CEO at the end of the year

Vivendi’s chairman loses battle for Ubisoft

Kingfisher says UK market 'more uncertain' as profit edges higher

GKN hits back at Melrose criticism of planned Dana deal (RNS statement)

Mothercare says lenders agree to defer testing of financial covenants

Carpetright scrambles to secure emergency funds; seeks at least 10 mln stg - Sky News

Shell sees downstream annual organic free cash flow of $6 bln to $7 bln by 2020

Norwegian Air raises $168 mln as expansion, fuel costs weigh

EU to unveil plan to tax turnover of big U.S. tech firms

Price wars heat up as Lyxor launches low cost ETFs in Europe

Fingerprint Cards denies giving price sensitive info to analysts

French fashion firm SMCP says profit margins to grow further in 2018

AB InBev sets climate, water goals to keep fizz in beer sales

Norway's Telenor in 2.8 bln eur asset sale to Czech investor PPF

Ferrexpo raises 2017 dividend, sees better demand this year

(Kit Rees and Tom Pfeiffer)

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EUROPEAN STOCKS FUTURES EDGE HIGHER (0710 GMT)

Stocks futures have confirmed that a slight tick higher is on the cards for European

equities this morning, though the FTSE could come under pressure from a stronger pound and a

drop in the copper price, which could weigh on the miners.

Here's your futures snapshot:

(Kit Rees)

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EARNINGS WATCH: FOCUS ON LUXURY (0646 GMT)

Here's a round up of European firms which are giving earnings updates today, with BMW and

Hermes among ones to watch.

Back in February Hermes saw some weakness in its shares after reporting a slowdown in Q4

sales growth due to stocks of its handbags running low (more a sign of popularity than anything

else), so it will be interesting to see whether demand from younger shoppers and Asia has fed

through into earnings.

ISHG.DE Q4 2017 Intershop Communications AG Earnings Release

IVUG.DE Q4 2017 Ivu Traffic Technologies AG Earnings Release

TRIA.PA Q2 2018 Trigano SA Corporate Sales Release

SBOE.VI Full Year 2017 Schoeller Bleckmann Oilfield Equipment AG Earnings Release

SKISb.ST Q2 2018 SkiStar AB Earnings Release

TRN.MI Full Year 2017 Terna Rete Elettrica Nazionale SpA Earnings Release

VSCk.DE Q4 2017 4Sc AG Earnings Release

V6CG.DE Q4 2017 Viscom AG Earnings Release

FPEG_p.DE Q4 2017 Fuchs Petrolub SE Earnings Release

ESP.L Full Year 2017 Empiric Student Property PLC Earnings Release

OHBG.DE Q4 2017 OHB SE Earnings Release

RHIM.L Full Year 2017 RHI Magnesita NV Earnings Release

HRMS.PA Full Year 2017 Hermes International SCA Earnings Release

HABG.DE Q4 2017 Hamborner Reit AG Earnings Release

ECT.AS Q4 2017 Eurocastle Investment Ltd Earnings Release

BMWG.DE Q4 2017 Bayerische Motoren Werke AG Earnings Release

(Kit Rees)

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MORNING CALL: EUROPEAN STOCKS SEEN OPENING HIGHER (0626 GMT)

Good morning. European stocks are seen rising today, building on yesterday's gains as

investors await the result of the U.S. Fed's policy meeting.

Financial spreadbetters expect Britain's FTSE to open 13 points higher, Germany's DAX to

gain 45 points and France's CAC to advance 10 points.

Overnight, China and Hong Kong stocks enjoyed gains, while a rise in energy stocks supported

Wall Street.

The focus could once again be on tech stocks after Facebook's shares slid a further 2.6

percent on Tuesday as it faces questions from U.S. and European lawmakers over reports political

consultancy Cambridge Analytica may have improperly gained access to data on 50 million users.

(Kit Rees)

(Reporting by Danilo Masoni, Helen Reid, Kit Rees and Julien Ponthus)