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LIVE MARKETS-Draghi works his magic, but not for banks

* European shares turn positive; banks fall

* ECB to end bond buys, keep rates steady through next summer

* Fed raises rates as expected, signals 2 more rate hikes this year

* Unilever (NYSE: UL - news) says "extremely unlikely" it will stay in FTSE 100

June 14 (Reuters) - 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

DRAGHI WORKS HIS MAGIC, BUT NOT FOR BANKS (1354 GMT)

Today's was indeed a "live" European Central Bank meeting but what caught markets by

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surprise was the central bank's dovish tone on interest rates, rather than the well-anticipated

decision to wrap up its stimulus programme.

It looks like Mario Draghi has worked his magic for the stock market, pushing the broader

euro zone index up 0.9 percent to its highest level in more than two weeks.

There is one exception however: banks, whose traditional lending business can reap better

margins when interest rates rise. Their sectoral index was down as much as 0.6 percent.

Karen Ward, chief market strategist at JP Morgan Asset Management, however, sees the glass

half full for the sector.

"At face value the fact that interest rates will stay lower for longer is not positive for

the financial stocks. However, it is too simplistic to argue that financials need higher rates.

If low interest rates support the health of the economy – not least via a weaker exchange rate –

then that will help demand for lending and volume bank lending," she said.

(Danilo Masoni and Helen Reid)

*****

ECB STATEMENT SENDS STOCKS HIGHER AS RATE HIKE SEEN FURTHER AWAY (1230 GMT)

Euro zone stocks have hit session highs, now up 0.2 percent, after the ECB issued a

statement saying rates will remain steady through next summer and announcing a tapering of its

asset purchases. The statement caused relief for stocks and bonds while the euro fell as it

pushed expectations of a rate rise further out.

Interest-rate sensitive autos and utilities stocks rose sharply after the statement, with

the autos sector up 0.9 percent and utilities up 0.1 percent. Meanwhile euro

zone bank stocks, which stand to gain from higher rates, swung wildly in choppy trading

and are now down 0.1 percent on the day.

Investors now await the press conference at 1230 GMT for further details.

"We still think the first rate hike is distant, but await more information... We especially

look for more clarification on the new guidance, which will further help to assess the ECB's

thinking on the likely next steps changing policy," say Nordea analysts.

Here's a reminder of global assets' performance since the ECB signalled the start of QE:

(Helen Reid)

*****

WHO TO BET ON FOR THE WORLD CUP? BOOKMAKERS! (1115 GMT)

Investors are making their bets ahead of kick-off for the 2018 World Cup at 1500 GMT today

with Russia v Saudi Arabia. And among those set to benefit the most in the corporate arena are

bookmakers themselves.

Interestingly, Berenberg analysts say the tournament usually drives higher betting margins

than other international football events because of such a high number of games. The previous

World Cup in Brazil drove from 2 percent (Ladbrokes Coral (LSE: LAD.L - news) ) to more than 4 percent (William Hill (Frankfurt: 633847 - news)

) of the total amount bet on sports that year on digital platforms.

The World Cup will probably boost quarterly numbers for GVC, William Hill, Paddy

Power Betfair, and Nordic players Betsson (LSE: 0RGV.L - news) and Kindred to a

lesser extent, they say, and accordingly the bookmakers' campaigns to win customers have reached

fever pitch with special offers and marketing ploys.

Kindred's Unibet has launched a World Cup chatbot to allow users to find odds and place

bets, while both Paddy Power (EUREX: 27913021.EX - news) and Coral are running world-cup themed quizzes with a 1 million

pound prize.

"For GVC we think the potential volume impact in the UK, together with the boost to revenues

in Germany (if the campaign proves successful) could more than compensate the negative effect of

the Italian football team (sadly) not being in the tournament," write Berenberg, adding the

tournament will also be "critical" for PPB to gain back market share in the UK.

Read our story for more on the companies set to rake in cash during the

tournament:

(Helen Reid)

*****

OIL EXPLORATION BUDGETS? "THERE'S FLEXIBILITY TO THE UPSIDE" (1030 GMT)

The oil price rally has made the energy sector one of the best-performing in Europe

but investors remain on the lookout for any further sign of improvement.

After meeting management of six seismic oil services firms - Petroleum Geo-Services (LSE: 0MHR.L - news)

, TGS, CGG (Euronext: 32269095.NX - news) , Polarcus (Stockholm: PLCSO.ST - news) , Spectrum (LSE: 0JII.L - news) and EMGS,

analysts at UBS (LSE: 0QNR.L - news) have some good news: demand for seismic continues to pick up and it seems that

oil companies may also have room to increase their exploration budgets this year.

"This (demand for seismic) is being driven by a range of customers from majors to smaller

E&Ps and by a number of geographies (West Africa and South America were highlighted as 'hot

spots') suggesting that the confidence improvement is widespread," they say in a note.

"Customer conversations also suggest that there is some flexibility to the upside in

exploration budgets for 2018 if oil prices remain around $75/bbl (this was seismic specific so

does not mean overall spend is going up)," they add.

(Danilo Masoni)

*****

ECB MEETING: THE END OF QE? (0854 GMT)

Analysts and investors are weighing in with their thoughts ahead of the ECB's meeting today

with high expectations that the end of QE could be signalled. It's an interesting divide between

those who think the recent political shake-up in Italy is spurring the ECB to act sooner, and

those who think it will in fact be a motivation to put the brakes on.

Paul Donovan, chief economist at UBS Wealth Management, has a good summary of expectations:

"There are hopes of either 1) an announcement of the timetable to end bond buying, or 2) an

announcement of an announcement of the timetable to end bond buying."

Arne Petimezas, rates analyst at AFS in Amsterdam, says: "I think they will announce that

they will announce the final taper of QE for the fourth quarter today, and say not much else.

There have been rumours that decision could be delayed to July, but with Italy they want to

teach people a lesson."

One trading desk sent this note round: "It'll discuss, and possibly announce, an end to

asset purchases, even as more evidence of slowing growth emerges. But there's unlikely to be

anything specific about rates."

Man Group (LSE: EMG.L - news) analysts say: "While this ought not to come as an enormous surprise – the end of

the ECB QE program was always expected to be in 2018 – the timing of the announcement, against a

backdrop of under-performing equity markets and renewed political turmoil in Italy and Spain,

appears strange in our view. If nothing else, such definitive action takes away optionality and

flexibility for the ECB at a time when these feel like a distinct benefit."

And one investor points out the ECB will not only have to take into account European

economic forces but also global ones, with European companies so reliant on emerging market

growth: "Draghi is pretty stuck - Europe is slowing down and if U.S. rate rises impact on

emerging growth that's an added problem for Europe."

Here's a reminder of the ECB's massive asset purchase programme:

(Helen Reid)

*****

OPENING SNAPSHOT: EUROPEAN SHARES FALL AFTER FED AS ECB LOOMS(0718 GMT)

Sandwiched between two central bank meetings, European shares are selling off this morning

after a more hawkish than expected Fed signalled two more rate hikes this year, more than the

market had priced in.

Bank stocks are leading falls across European benchmarks with all the STOXX 600 sectors in

the red.

A crucial ECB meeting also awaits investors anxiously anticipating more concrete guidance

from Draghi on when to expect the end of QE.

Shining among the selling are Aveva, jumping 8.4 percent after its full-year revenues rose,

GN Store Nord (LSE: 0K9P.L - news) , up 8 percent after its GN Audio segment lifted its growth guidance, and Swedish

mobile operator Tele2 (LSE: 0QE6.L - news) after an upgrade from Morgan Stanley (Xetra: 885836 - news) to "overweight" on higher synergy

potential after its Com Hem (LSE: 0QV0.L - news) merger.

Rolls Royce (LSE: RR.L - news) shares rose 3 percent after it announced 4,600 job cuts in a big restructuring.

Notable fallers include several UK stocks going ex-dividend (Persimmon (Frankfurt: 882058 - news) , Severn Trent (Other OTC: STRNY - news) , WPP (Frankfurt: A1J2BZ - news) ,

Intermediate Capital (Frankfurt: I2X2.F - news) ) and Pearson (Xetra: 858266 - news) suffering from a Barclays (LSE: BARC.L - news) downgrade to underweight.

(Helen Reid)

*****

WHAT YOU NEED TO KNOW BEFORE THE OPEN (0652 GMT)

European shares are set to open lower with rate-sensitive sectors in the spotlight after the

Fed signalled two more interest rate hikes this year and ahead an ECB meeting that will debate

whether to end its asset purchases by year-end.

The pan-European STOXX 600 index has been moving within a tight 2-percent range since end

May and it is unlikely to deviate from that today with futures last trading down 0.4-0.6

percent.

Autos, recently hit by worries of higher US import tariffs, could also be in focus after

news of a 1 billion-euro fine for VW over emissions cheating and an FT report saying that

Renault CEO will likely step down before his mandate ends. VW shares are seen down 1 pct in

pre-market.

Other stock movers: Rolls-Royce to cut 4,600 jobs to save 400 mln stg a year (+1% pre-mkt);

GSK's two-drug HIV treatment meets main goal in late stage studies (+1-2% pre-mkt); Sweden's

Hexagon (LSE: 0GRX.L - news) says on track to reach 2021 targets; Italy's Acea chairman should resign - Deputy PM to

radio; Fashion retailer Gerry Weber issues a profit warning and said it was implementing a

restructuring programme (-7% pre-mkt)

For more headlines check out the previous post.

(Danilo Masoni)

*****

EARLY MORNING HEADLINES ROUND-UP: AUTOS IN FOCUS (0554 GMT)

Turning to corporate news that could move single stocks today, here are the top headlines

that caught our attention.

It looks that the auto sector, recently hit by worries the US could apply higher import

tariffs, could be in the spotlight with VW fined 1 billion euros over emission cheating and a

report saying Renault CEO will likely step down before his mandate ends.

VW fined 1 bln euros by German prosecutors over emissions cheating

Renault (LSE: 0NQF.L - news) 's Ghosn likely to step down as CEO before term ends- FT

Ford says fuel cell venture with Daimler (IOB: 0NXX.IL - news) will close

Mind the gap - Thyssenkrupp (IOB: 0O1C.IL - news) in value struggle with Tata Steel (BSE: TATASTEEL.BO - news)

Pernod Ricard (TLO: RI-U.TI - news) wines delayed at Chinese ports amid strained ties with Australia

UK watchdog to complete enforcement probe into RBS (LSE: RBS.L - news) business unit in July

FDA finds deficiencies in Mylan (Hamburg: 27249935.HM - news) 's generic version of GSK's Advair

Italian banks to shed 70 bln euros in bad loans this year -PwC

Britain's Sky (Frankfurt: 893517 - news) , Perform win broadcast rights for Italy soccer

Britain's crime agency investigating Dixons Carphone (Frankfurt: CWB.F - news) cyber attack

Italy's top court rejects appeal to stymie Shell (LSE: RDSB.L - news) , Eni (LSE: 0N9S.L - news) corruption trial

Italy's Benettons tap GIC among bidders for Cellnex holding vehicle - sources

Etihad Airways in talks to cancel, defer Boeing (NYSE: BA - news) 777X orders -sources

Retelit (Frankfurt: EAEN.F - news) to challenge Italian government's use of 'golden powers'

And here some top market headlines:

> Asian shares slip on Fed hike, trade fears and soft China data

> Wall St falls as Fed signals two more hikes this year

> Nikkei drops, risk sentiment hit by hawkish Fed tone, trade war worries

> U.S. yields climb after Fed flags 2 more rate hikes this year

> Fed-driven dollar surge fades, focus moves to ECB meeting

> Gold slips as Fed signals more rate hikes, but trade worries limit losses

> Copper slips to near one-week low after soft China data

> Oil falls on lower China refining activity, fresh U.S. crude output record

(Danilo Masoni)

*****

MORNING CALL: EUROPEAN SHARES SEEN DOWN AFTER FED, BEFORE ECB (0513 GMT)

European shares are expected to open lower this morning after the Federal Reserve raised

interest rates and signalled two more hikes this year and ahead of the European

Central Bank meeting that will debate whether to end its huge asset purchases by year-end

.

Here are your morning calls, courtesy of David Buik at CORE SPREADS.

Over in Asia, the Fed's more hawkish tone in forecasting a slightly faster pace of

tightening drove shares lower, while concerns about U.S.-China trade frictions kept investors on

edge. Here are the highlights of our latest global markets report.

* Fed raised rates as expected, sees 2 more rate hikes this year

* Concerns about U.S.-China trade war cast shadow

* China data surprisingly soft

* Dollar quickly loses steam after jump on Fed, focus on ECB

(Danilo Masoni)

*****