LIVE MARKETS-Closing snapshot: still stuck in a 5-point range

* European shares up 0.1 pct

* Autos and tech rally after China GDP data

* Miners, Bunzl drag on FTSE 100

* Healthcare stocks biggest weight

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 Danilo Masoni. Reach him on Messenger to

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

CLOSING SNAPSHOT: STILL STUCK IN A 5-POINT RANGE (1625 GMT)

Pan-European STOXX 600 index inched up again, its sixth straight day of gains its

longest winning streak (albeit with paltry sized moves) since early February, but it's still

stuck in a narrow 5-point range it's been trading in since April 3.

Stocks spent most of the day in the red even after Chinese GDP data until Wall Street

opened. Auto stole the limelight, rising to a Sept. 29 high as the strong Chinese GDP data and

chatter China could ease restrictions on car purchases boosted their stocks.

Germany's DAX and France's CAC 40 outperformed STOXX 600 with Frankfurt touching the highest

since October 5, and Paris near 10-month highs.

In corporate news, earnings were the main drivers today.

Bunzl shares took a beating after it warned of slowing growth, particularly in its

biggest market North America. While, Mediclinic shares surged on reassuring outlook.

ASML's better-than-expected earnings, hopes of potential Chinese stimulus to car sales and

the GDP data boosted semiconductor stocks.

A settlement between Apple and Qualcomm to end their long-running lawsuit helps the iPhone

maker close the gap with rivals such as Samsung Electronics in delivering a 5G phone, which will

boost its suppliers.

"The chipmakers will benefit from the fact that Apple will now have capacity for 5G

products," says Neil Campling, head of TMT Research within the global thematic group at Mirabaud

Securities.

STMicro, one of Apple's major suppliers, will be the biggest beneficiary in Europe from

Apple's fresh 5G push, he says. Its shares closed up 1.7 percent, while wafer maker and TSMC

customer Siltronic jumped 5.2 percent.

Key earnings to watch out for tomorrow: Unilever and Software AG - and it's the last trading

day before the long Easter break.

(Thyagaraju Adinarayan)

*****

GEARING UP FOR A TRADE DEAL AND STOCK MARKET CLIMAX (1305 GMT)

BlackRock's Larry Fink said this week the market is getting set up for huge inflows into

equities and it turns out he's not alone with a rosier outlook, at least for the

short term.

We already mentioned Credit Suisse and UBS and even Christopher Potts - Kepler

Cheuvreux's top strategist, who only two weeks ago said the rally will be arrested very soon -

has turned less defensive.

Potts now expects a third climax for equity markets (following the two recorded in 2018)

this quarter, probably within the next few weeks.

"The most evident catalyst for climax should be the conclusion of the Sino-American trade

agreement that we are led to believe is in the making," he says.

This expectation can be nicely illustrated by this Reuters pix below.

But then Potts adds: "The debate really concerns global growth: the revival of risk assets

in America and China is feeding the perception that it is already re-accelerating. This is not

our understanding. True or false? Markets should provide the answer in this quarter."

His diagnosis leads him to expect a rally for the U.S. top share index S&P500 in the

coming weeks, followed by a correction in May-June when the positive effects from the conclusion

of the Sino-American negotiation will have faded.

Turning to country allocations in Europe his less defensive stance has led him to remove his

underweight position in German and euro zone stocks, and moves back to neutral in Switzerland.

Swiss blue chips index is hovering near record highs.

(Danilo Masoni)

*****

PROS AND CONS OF TIERED DEPO RATES (1259 GMT)

As the dust settles on the ECB's monthly policy meeting last week, SocGen's head of equity

strategy Alain Bokobza looks at the pros and cons for euro-zone banks of a tiered deposit scheme

that's been mentioned as a possible lifeline to the sector as it battles ultra low rates for

longer.

His conclusion: unconvincing.

While it would alleviate costs on the sector which total about 7 billion euro ($7.9

billion) a year, boosting sentiment in the beleaguered sector.

Overall impact would be limited as it's already partially priced in, he says.

Examples in Switzerland and Japan, where central banks introduced tiered systems in January

2016 and December 2014 respectively, aren't favourable either. Japanese banks have

underperformed the market by 28 percent and Swiss by 15 percent, he says.

This can be misleading as both central banks were implementing negative rates at the same

time whereas the ECB would be doing it to mitigate the impact of negative rates already in

place.

But if the central bank was to resort to a tiering system, it would also signal that things

are worse than expected - that the bank was unable to hike interest rates, signalling lower for

longer interests and cheap loans being issued in September under the TLTRO scheme hadn't worked

their magic.

Those are all major headwinds for the banks.

Aside from all that, Bokobza believes the euro-zone economy is showing signs it could

rebound, reducing the need for such a programme. That should be a relief. Still, he's keeping

his neutral stance on the sector for now though as bond yields are expected to remain very low.

(Josephine Mason)

*****

BIG OIL OUT OF FASHION (1142 GMT)

So Gen Zs are not fans of big consumer brands (see our blog yesterday and L'Oreal's results

last night), looks like they're not one of Big Oil either.

Barclays points to a YouGov survey that suggests only a fifth of 18-24 year olds are likely

to buy shares in the oil & gas sector.

It's not immediately clear how many Gen Zs have cash to splash investing in stocks.

But is that a worrying factor?

Well, shares of big oil companies globally are far behind the recent oil rally.

WTI crude has jumped by a quarter this year, while the integrated big oil companies

have risen just 6 percent. (see below)

"The European energy shares have stubbornly refused to re-rate over the past two years

despite a structural reset and much improved free cashflow," Barclays analysts say.

They believe engaging Gen Zs to take an interest in the sector may halt or even reverse the

decade-long derating of the energy sector.

But it may be an uphill battle. It's not just younger people but investors in general who

seem to be "growing increasingly skeptical of the long-term value of oil and gas assets given

the need for an accelerated energy transition", says Barclays referring to renewable energy and

anything to do with zero emissions.

Last month, Norway's trillion-dollar sovereign wealth fund, the world's biggest, said it

will sell its stakes in oil and gas explorers and producers and companies that say they follow

sustainable and environmentally friendly practices are getting more popular.

Check out our story on young people's attitudes towards Big Oil in Norway:

(Thyagaraju Adinarayan)

*****

CHINA DELIVERS, BUT NO CIGAR (1124 GMT)

Phew! So, the much-feared greater slowdown in the Chinese economy in Q1 was averted and

there's a relief rally across European stocks this morning, right?

Well, no.

Autos and tech stocks are seeing decent gains, but in what could best be

described as a muted response to the numbers, the pan-European STOXX 600 is down 0.1

percent and the euro-zone STOXXE is up 0.1 percent.

We've had a slew of Q1 earnings this morning, including from heavyweight Danone

which is down 0.9 percent after disappointing Chinese sales which may be limiting gains.

There were various reasons for the less-than-jubilant reaction to the data.

Some traders suggested the recovery - albeit tentative - may curb Beijing's push to shore up

the world's No. 2 economy with stimulus measures from tax cuts to boosting bank loans to small

businesses.

While there's no immediate need to cut rates further, Citi economists say the apparent

success in boosting domestic demand through government steps and the repeated messages of

support for private business and market-oriented reforms have reduced policy uncertainty.

"The government seems to have entered a 'wait and see' mode on extra fiscal stimulus, but

may speed up structural reforms," their economists say.

In response to today's report, the bank raised its 2019 GDP forecast for China to as high as

6.6 percent. That's much higher than the 6.2 percent forecast by economists in a Reuters poll

ahead of today's data.

But really the failure to rally this morning may be more about the market having priced in

expectations for a rebound in the Chinese economy during its 3-1/2-month rally rather than being

based on fresh investor worries about the Middle Kingdom.

"What you are going to see in the very short term is the market taking some breath given how

fast they have gone recently," says Justin Onuekwusi, fund manager Legal and General Investment

Management.

He suggests taking on a bit more risk and buying any dips based on a medium-term view.

If data as important as China's GDP numbers isn't enough to spur further buying and break

the STOXX 600 out of its historically narrow trading range, then it suggests the stock market

may be close to topping out.

With Q1 earnings expectations at rock bottom, everything hinges on the U.S.-China agreeing a

truce to end their damaging trade spat. Citi economists reckon there could be a framework deal

some time before the end of June ..... the waiting game continues.

(Josephine Mason, Sujata Rao and Danilo Masoni)

BUY VALUE? (1049 GMT)

Buy value yes, buy value no - UBS has weighed in the debate to conclude that the cheaper end

of the stock market could be a tactical buy, rather than an investment for the longer term.

And it's worth noting that two cheap sectors that face growth headwinds, autos and

banks, are doing nicely today, suggesting UBS is not alone in holding this view.

Back to the Swiss bank, analysts there highlight how the relative valuation gap between

Growth and Value has reached the peak levels seen in periods like the dot.com bubble or mid-2016

when concerns about global growth were acute.

"When valuations reached such extreme highs what followed was either a short-term Value

rebound (2009, 2012, 2016) or a long period of Value leadership (2000)," say Joao Toniato and

team.

So how is it going to pan out this time?

"We see a significant risk of a Value rebound going forward. However, we see this more akin

to 2012 or 2016 rather than the start of a long period of Value leadership such as 2000. In

other words, this is more likely a trade than an investment given we are at a relatively late

stage in the economic cycle...," they argue.

Among the value picks it may be worth having a look at, they highlight turnaround specialist

Melrose Industries, utility EDF, banks Barclays and BNP Paribas

, retailers Tesco and industrial group Siemens.

(Danilo Masoni)

*****

CHINA AND ASML HELP DRIVE EUROPE'S CHIPMAKERS UP (1036 GMT)

A slew of positive news - from ASML, China GDP, and a Qualcomm/Apple settlement - is driving

chipmakers up this morning, though a transatlantic gap still remains.

The semiconductor equipment maker delivered stronger-than-expected first quarter profit this

morning, saying demand from Chinese chipmakers will help growth to accelerate.

That's helping boost sentiment across semiconductor stocks with Siltronic up 6.7 percent,

AMS up 3.6 percent, Infineon up 1.8 percent and STMicro up 2.2 percent.

Infineon and STMicro, which supply the auto sector, may be getting an extra boost from talk

that China may ease car purchase curbs.

"ASML Q1 was well ahead of expectations, but more importantly Q2 guidance was broadly in

line even though there was concern of sharply falling eDRAM prices," Janardan Menon, tech

analyst at Liberum, tells us, adding that ASML drew strength from its Logic clients.

The Philadelphia semiconductor index also hit a new record high after Qualcomm soared

following its settlement with Apple calling for the iPhone to once again use its chips.

The surprise settlement could show that semiconductor stocks can stand up to the iPhone

maker they all depend on.

"Qualcomm stood firm. And won this particular hand, hands down," writes Neil Campling, head

of TMT Research within the global thematic group at Mirabaud Securities.

Overall, Liberum's Menon sees the semiconductor cycle bottoming out in Q2 this year. Share

prices are already rallying in anticipation of a new cycle, he says.

As you can see below, European and Asian chipmaker stocks have lagged their U.S. peers since

the start of last year and have been slower to recover from a difficult 2018.

(Helen Reid)

*****

AGEING BULLS OR RAGING BULLS? (0833 GMT)

A surprisingly cold welcome by markets to strong Chinese GDP data this morning, isn't it?

Are the markets hesitant to buy in the China recovery story?

Looks like the big banks are not. Credit Suisse and UBS are turning bullish on equities,

particularly Europe, this week.

Credit Suisse has raised it tactical weighting on global equities to "overweight". It had

reduced to "benchmark" in Feb.

Where is the upside in equities? Show me the money!

"We think it is non-U.S. equities, which have higher beta into the global cycle, are earlier

cycle, are significantly cheaper than those in the U.S. and are somewhat under-owned," Credit

Suisse analysts say.

Credit Suisse points to improving global growth and says when the breadth of global PMIs

rises, so does earnings growth. (U.S. and euro-zone PMIs are due tomorrow).

UBS on the other hand, shuffles its top macro trades with a go-long strategy on Germany's

DAX, China equities and domestically-focused UK stocks.

"Europe has been the laggard, but with most of the weakness external, the rebound in China

and the U.S. should see Europe follow," UBS says.

The bullishness is despite STOXX 600 index's strong run year-to-date, rising 15

percent.

However, this has not been reflected in the fund flows, adds Credit Suisse saying inflows

into equities have been only a third of those into bonds.

"These investors could still come into the market, driving indices higher."

Flows into bonds far exceed those into equities since 2009:

(Thyagaraju Adinarayan)

*****

MINERS HIT, ROCHE OUTSHINES SECTOR, APPETITE FOR CHIPS (0755 GMT)

Despite the strong Chinese data, which left some investors wondering whether it's too early

to call for a recovery in the world's No. 2 economy, European shares are off to a sluggish start

this morning in a market that's consolidating somewhat after its strong rally this year that has

lifted the STOXX 600 to eight-month highs.

Top weight to the pan European index are healthcare stocks, even though Roche

was able to buck its sector's weakness and rise as much as 1.9 percent at the open after

the Swiss drugmaker raised its 2019 outlook.

Consumer staples aren't going well either with the pricey sector hit by a drop in food giant

Nestle, which continued to slide from a record high hit earlier this month, and a

uninspiring update from France's Danone. Nestle reports Q1 results tomorrow.

Basic materials stocks were also a drag.

News that Vale will reopen its Brucutu iron ore mine shuttered since February after a deadly

incident sent miners lower amid expectations it will boost supplies of the steelmaking

ingredient. Chinese iron ore prices fell almost 5 percent on the plan, which more than offset

news that BHP joined Rio Tinto in cutting its FY iron ore output forecast after

a tropical cyclone.

Chipmakers were on the up, however following a better-than-expected update from ASML

and after a rally in Qualcomm shares that lifted the Philly chip index

overnight after Qualcomm reached a surprise settlement with Apple that called for the iPhone to

once again use its modem chip.

Autos were also strong with German carmakers likely supported by the strong data from key

China market.

Here's your opening snapshot:

(Danilo Masoni)

*****

WHAT YOU NEED TO KNOW AT THE OPEN (0658 GMT)

European shares are expected to steady at eight-month highs following stronger-than-expected

GDP data from China with the focus moving to the start of the reporting season. Futures on main

country benchmarks were trading between a rise and a fall of 0.1 percent.

In corporate news the focus is turning to the start of the reporting season with Roche and

L'Oreal both posting solid updates. The Swiss drugmaker raised its 2019 outlook after Q1 sales

rose 8 percent, beating analyst estimates, while L'Oreal also posted higher-than-expected Q1

sales, powered by growth in the division that makes luxury cosmetics and strong demand in Asia.

Semiconductor equipment maker ASML Holding posted better-than-expected Q1 earnings and said

expected growth to accelerate through the year. Shares in Roche, L'Oreal and ASML were up 2-3

percent in premarket trade. Meanwhile Danone kept its forecasts for a further rise in sales and

profits this year after posting an in-line Q1. A profit warning from Pendragon is set to send

shares in the automotive online retailer down 10-25 percent.

In dealmaking Credit Agricole and Spanish bank Santander said they plan to combine their

custody and asset servicing operations in a deal that would create a new global leader. Shares

in the French bank were up 0.5 percent in premarket.

Elsewhere, traders say shares in chipmakers could get a lift after Qualcomm shares soared

overnight after it reached a surprise settlement with Apple that called for the iPhone to once

again use its modem chips.

Other stock movers: Ericsson profit beats forecasts for fifth straight quarter as savings,

5G sales kick in; Hunting's core profit rises, but margins hit at U.S. shale unit; TomTom posts

Q1 results above estimates, wins two HD map deals; Handelsbanken Q1 profit tops forecast on

provision reversal; Bunzl revenue growth slows as North America business lags

(Danilo Masoni)

*****

FUTURES FLAT AS Q1 SEASON GETS UNDERWAY, EYES ON CREDIT AGRICOLE/SANTANDER (0615 GMT)

Stock futures have opened little changed, confirming earlier indications from spreadbetters

for European shares to steady at eigh month highs at the open following better than expected

Chinese GDP data.

On the corporate front, Roche and L'Oreal will be in focus as the Q1

reporting season gets underway with both both companies posting solid updates. The Swiss

drugmaker raised its 2019 outlook after first-quarter sales rose 8 percent, beating analyst

estimates, while L'Oreal posted higher-than-expected first-quarter sales, powered by growth in

the division that makes luxury cosmetics and strong demand in Asian countries.

Results from semiconductor equipment maker ASML Holding also looked strong with

the company reporting better-than-expected first quarter earnings and saying it expected growth

to accelerate through the year. Meanwhile Danone kept its forecasts for a further rise

in sales and profits this year.

In dealmaking, Credit Agricole and Spanish bank Santander plan to combine

their custody and asset servicing operations in a deal that would create a new global leader

Here's your futures snapshot and below an early morning headlines roundup.

Credit Agricole and Santander to combine custody and asset servicing arms

Roche lifts 2019 outlook as Q1 sales beat forecasts

L'Oreal sales steam ahead at steady pace in Q1

L'Oreal bets on Garnier turnaround

ASML: maintains bullish FY 2019 outlook after Q1 beat

Food group Danone keeps goals despite weaker Q1 sales

Net outflows continue at Swiss asset manager GAM

ING approached Commerzbank about possible tie-up - Manager Magazin

BHP cuts iron ore production outlook after Australian cyclone

ABB names Voser as interim CEO after Spiesshofer quits

France's AXA provided insurance cover for two Notre-Dame contractors

Banco Bpm accepts offer from Illimity for sale of bad loans worth 650 mln euros

Italy's Moncler CEO says Q1 results were good, in line with expectations

(Danilo Masoni)

*****

EUROPEAN STOCKS SEEN STEADYING AT AUGUST HIGHS (0524 GM)

European shares are expected to steady near eight-month highs today following another set of

strong data from China that eased worries over the health of the world's second largest economy.

China's economy grew at a steady 6.4 percent pace in the first quarter from a year earlier,

defying expectations for a further slowdown, as industrial production jumped sharply and

consumer demand showed signs of improvement.

Financial spreadbetters at IG expect London's FTSE to open 7 points lower at 7,463,

Frankfurt's DAX to open 4 points higher at 12,105, and Paris' CAC to open 4 points higher at

5,533. On Tuesday, the pan-regional STOXX 600 benchmark index hit its highest level

since August 10.

Over in Asia, shares swung higher as the stronger-than-expected Chinese data signalled that

Beijing's policy stimulus may finally be gaining traction.

"If traders were hoping for more evidence that an economic recovery was underway in China,

well at first glance the data is even better than the most ardent China bulls had expected while

providing a not too subtle reminder never to discount the positive effect of China credit," says

Stephen Innes, Head of Trading at SPI Asset Management.

(Danilo Masoni)

*****

($1 = 0.8847 euros)