LIVE MARKETS-Coming soon: The "invest-in-media-stocks season"

* European shares start week on the back foot

* Italian stocks lead decline

Oct 8 - 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

COMING SOON: THE "INVEST-IN-MEDIA-STOCKS SEASON" (1012 GMT)

A reform of French broadcasting rules may lead to sky-rocketing profits at M6 and TF1 but

that's not the only reason to invest, Barclays analysts believe.

It's also the right time of the year.

"The media sector usually outperforms the wider market between mid-November and end of

January", the Barclays note states, adding that "this has happened 15 times in the last 20 years

and 15 times out of 16 when excluding recession years".

Of course the impact of the reform of French television could be very substantial.

"Our analysis indicates that an optimal scenario offers 93 pct upside potential to TF1's

2019E EPS and 47 pct for M6", they write, noting planned changes in advertising rules and taxes

notably.

(Julien Ponthus)

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ITALY'S DISCOUNT TO EUROPE IS NOW BIGGER THAN DURING THE EURO CRISIS (0949 GMT)

The FTSE MIB is now trading at a wider discount to euro area equities than during the

sovereign debt crisis - a bad omen for the Italian index under pressure today again from the

EU's stern words over the weekend.

"The market reaction has been relatively intense, although largely contained to Italian

assets," Goldman Sachs analysts write.

Interestingly, they note the correlation of Italian equities with BTP spreads is more

negative now than in the 2011-2012 period.

Overall European equities have been dented recently by a potent combination of political

risks with Brexit, Italy's budget and the trade war jostling for position.

"Political risk could fade slightly if the EM deceleration stabilises, the UK negotiates an

exit deal from the EU and rating agencies do not downgrade Italy's rating," say GS analysts who

believe all these more positive scenarios will come to pass.

(Helen Reid)

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ITALY LEADS EUROPE DOWN, NORSK HYDRO SHINES (0718 GMT)

The FTSE MIB is down 1.5 percent to its lowest since 21 April 2017 as government bond yields

hit new highs, putting pressure on bank shares.

It's the worst-performing in a weak session across Europe, with the STOXX down 0.4 percent

and DAX down 0.6 percent.

The EU over the weekend reiterated its concern over Italy's budget plans, but Rome insisted

on Saturday it would "not retreat".

Meanwhile in corporate moves Norsk Hydro shares are topping the STOXX, up 4.7

percent, after the aluminium firm got a key permit helping it towards restarting its Alunorte

alumina refinery at half capacity.

Hearing aid maker William Demant, however, is bottom of the index, down 5.5 percent

with traders pointing to a possible competitive threat from Bose after the FDA approved its

over-the-counter hearing aid. https://engt.co/2y8s9gf

(Helen Reid)

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ON OUR RADAR AT THE OPEN: A LOT OF RED (0655 GMT)

Futures are deep in the red now. Rising U.S. rates are still very much an issue but there

are also fresh fears the trade war could hurt China more than foreseen.

While investors still wait for the earnings season to begin in earnest, there’s quite a lot

of corporate news this morning.

A major news development in the asset management industry is obviously the possible merger

between Schroders and Lloyds’ AM arm. It’s a would be among the biggest wealth management

tie-ups.

Still in the financial industry, Prudential said is eager to make deals in Asia and Legal

and General scored a 2.4 billion pension risk deal.

More M&A with British fashion retailer French Connection saying it is reviewing strategic

options, including selling itself and an FT report of fashion chain H&M acquiring a stake in

Swedish fintech company Klarna.

Alitalia’s rescue plan could see the state take a stake of around 15 percent in the carrier

along with separate investments by state-owned firms such as Ferrovie dello Stato and a foreign

player.

Corporate governance issues with Telecom Italia CEO Amos Genish saying he was committed to

staying despite counterproductive tensions between the company's management, its board and

shareholders.

(Julien Ponthus)

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FUTURES OPEN IN THE RED (0610 GMT)

Futures have started trading and while it looked a bit mixed initially, the overall picture

is getting increasingly red.

Apart from a bit of sunshine in Spain (up 0.1 pct), the other main futures are all in

negative territory:

(Julien Ponthus)

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MORNING CALL: ON THE BACK FOOT (0527 GMT)

There's no change of mood on the market this morning as we're about to enter a new week of

trading.

The vibe in Asia is a bit grim with Chinese markets stumbling as worries grow on a possible

knock to growth from the trade war despite the central bank moving to pump more liquidity.

In the United States, the consensus view seems to be that Friday's job data continues to

paint the picture of a booming economy which may require faster than expected monetary

tightening not to overheat.

"The bottom line is that the labour market continues to tighten, which is and will feed

through to higher wages, creating inflationary pressures", wrote LCG research team this morning.

"This will continue to push rate expectations higher and pressure stocks lower", they

warned.

Financial spreadbetters expect London's FTSE to open 5 points lower, Frankfurt's DAX to go

down 4 points and Paris' CAC to retreat 7 points.

(Julien Ponthus)

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