LIVE MARKETS-European equity funds enjoy highest inflows in 2018 so far

* STOXX 600 edges up

* Earnings dominate trading

* Ericsson falls 9 pct after loss wider than expected

* Capita plummets after profit warning, rights issue

Jan 31 (Reuters) - Welcome to the home for real time coverage of European equity markets

brought to you by Reuters stocks reporters and anchored today by Helen Reid. Reach her on

Messenger to share your thoughts on market moves: helen.reid.thomsonreuters.com@reuters.net

EUROPEAN EQUITY FUNDS ENJOY HIGHEST INFLOWS IN 2018 SO FAR (1011 GMT)

European equities remain the favourite among global investors, according to fresh flows data

from HSBC and EPFR. Weekly fund inflows over the last three weeks are among the top ten weekly

inflows since the beginning of the data series, HSBC finds.

"In our last note on investor allocation we highlighted muted equity fund flows in Europe in

Q4 2017 and advised investors to watch this space over coming weeks," write HSBC strategists.

"Year-to-date in 2018, European fund flows have seen a big turnaround, clocking inflows in

excess of $22 billion, which are also the highest across all major regions."

Last year Europe recorded the highest equity inflows across all major regions, accounting

for over one-third of global equity fund inflows. This year could be shaping up to deliver

similarly impressive figures.

On the country level there are some interesting developments: global funds are raising their

allocation in the UK from the lowest level in over ten years. In December 2017 global funds

increased UK holdings by 52 basis points, causing the 5-year z-score of global funds holdings in

the UK to hit its highest level since July 2016.

And uncertainty over Italy's upcoming election has caused global funds to trim their

exposure to the country. They've reduced their weightings in Italy by over one standard

deviation compared to its long-term average value.

(Helen Reid)

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WEAKENING DOLLAR BLIPS ON EUROPEAN EQUITY RADAR (0927 GMT)

After spirits maker Diageo last week, now big German industrial names are pointing

to dollar weakness as a significant headwind.

Siemens ( SIEGn.DE) says its medical equipment business Healthineers and its industrial

businesses were hit by negative currency effects, which took 5 percentage points off order

growth. And industrial chipmaker Infineon has slashed its revenue guidance blaming

the weakening U.S. currency.

We found last week that shares of European exporters have slightly outperformed their

domestically exposed peers despite a slowly strengthening euro.. Can that last?

"Until recently we were still getting upgrades on dollar strength against the pound, now

we're getting to this halfway house where the historic numbers look pretty good and prospective

numbers look much more challenging because of the currency and we think that will start to feed

through," says Simon Gergel, Chief Investment Officer for UK Equities at Allianz Global

Investors.

Raymond James has worked out some European winners and losers from a 10 percent drop in all

currencies vs the euro. It finds "a stronger euro should not hurt companies, as long as the

synchronized GDP growth across developed economies continues".

Winners include Vodafone, Total, GKN, losers include Yara

, Symrise, Lanxess, Suez, Fortum, Clariant

, Pernod Ricard, Adidas, LVMH, E.ON and

Henkel.

(Tom Pfeiffer and Kit Rees)

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BAD MONTH FOR UK OUTSOURCERS GETS WORSE (0830 GMT)

It's been a terrible month for UK outsourcers. After Carillion collapsed, now

Capita is going into brace mode following a profit warning, scrapping its dividend and

announcing it will go to shareholders for fresh funds.

The new CEO Jonathan Lewis also wants to raise cash from asset sales as he sets out a vision

for a simpler business focused on fewer markets. But he expects the company to bleed cash this

year and the business outlook appears to have got even worse since the company's last market

update, with Lewis pointing to delays in decision making, weakness in new sales and a higher

level of attrition than expected.

An index of support services companies is down 0.6 percent this morning in a rising market.

Babcock is down 3 percent, Serco 1.5 pct, Kier 2 percent.

(Tom Pfeiffer)

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OPENING SNAPSHOT: EARNINGS DOMINATE EUROPEAN SHARE TRADING (0816 GMT)

European shares have opened slightly higher this morning with a broad-based move higher, but

it's earnings which are driving moves.

Individual gains and losses on the STOXX 600 are ranging between a gain of 6.2 pct and a

loss of 31.8 percent, the latter thanks to Capita's plunge. More on that in a bit.

Here's your opening snapshot:

(Kit Rees)

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KEY CALLS FOR EUROPEAN EQUITIES (0758)

It looks like we could see some hefty moves today thanks to earnings.

Among those standing out for us (based on indications from trading desks):

Capita - called as much as 40 percent lower after a big profit warning and dividend

suspension

Infineon - seen down 3 to 4 percent, traders saying sales came were in line but the firm cut

its sales guidance

Ericsson - seen down 2 to 3 percent on the back of a sales miss

H&M - called up as much as 2 percent thanks to better than expected results, though outlook

and sales weak

(Kit Rees)

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WHAT'S ON THE RADAR FOR EUROPEAN STOCKS (0753 GMT)

A hesitant recovery seems to be in store for European stocks after a global risk-averse turn

dented benchmarks yesterday. Euro zone blue chips were still on track for their best month since

September, though, as a month of eye-watering gains across equities drew to a close.

Results take centre stage today, with a slew of companies reporting across industrials,

banking and retail.

Banks had mixed results as ING’s profit disappoints while SEB beats expectations. The sector

is under extra pressure to deliver strong results as it’s become a favourite since the end of

last year as investors rotated away from tech and into financials. Even after Tuesday’s losses,

the STOXX banks index is set for its best month since March last year.

It'll be a dark day for Capita (and pay day for short-sellers) as the outsourcer's

shares are indicated down as much as 40 percent after the company announced an unholy trinity of

a profit warning, rights issue and dividend suspension.

Autos stocks could be under pressure after data showed British car production fell last year

for the first time since 2009 and investment slumped by a third as uncertainty over Brexit hit

demand.

Pharmaceuticals could also be a focus after President Trump again took aim at the sector,

lambasting high drug prices in his State of the Union speech.

And in an early sign of the weak dollar hurting some exporting European companies, chipmaker

Infineon slashed its revenue guidance, blaming the greenback.

Here are some extra headlines which could move the market this morning:

UK car output drops for first time since 2009, investment slumps

U.S. agencies probe Apple over slowing iPhones -Bloomberg

Italy's Safilo sees 2017 adj EBITDA halving

JCDecaux beats fourth-quarter revenue target

(Helen Reid)

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EARLY MORNING EUROPEAN HEADLINE ROUND-UP (0736 GMT)

It's a busy day of earnings today, so here's a summary of the headlines we're looking at.

Europe:

H&M Q4 pretax profit falls less than expected

Siemens Q1 profit dips on Power and Gas business declines

ArcelorMittal upbeat about 2018, slowly resumes dividend

Ericsson posts bigger than expected Q4 loss

Santander Q4 profit falls 4 pct on U.S. impairments

Truck maker Volvo raises market outlook after Q4 order boom

Lonza's full-year core profit soars 82 pct on acquisitions

Electrolux Q4 operating profit tops forecast

Infineon slashes revenue guidance on weak U.S. dollar

SEB raises dividend as Q4 profit beats expectations

Energy group Total announces major deepwater oil discovery in Gulf of Mexico

ING quarterly profit misses on costs, weaker financial markets

Dutch telco KPN's Q4 results slip as roaming rules hurt

Sanofi and partner seek European Medicines Agency review for sleep sickness

product

Wartsila Proposes Share Split

UK:

Britain's Capita plans rights issue after profit warning

Britain's SSE raises FY profit outlook

Centamin posts fall in 2017 core profit on lower output, higher costs

Wizz Air posts record passenger numbers and profit in third quarter

UK's Britvic Q1 revenue up 3.3 pct

Dairy Crest says 9-month revenue well ahead of last year

Shell says to sell its stake in Thai Bongkot fields to PTTEP for $750 mln

Macro:

German retail sales fall unexpectedly in December

(Kit Rees)

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FUTURES INDICATE HESITANT RECOVERY FOR EUROPEAN STOCKS (0708 GMT)

Stock futures have opened up 0.1 percent across the major European benchmarks, suggesting a

rather hesitant recovery from yesterday's sharp falls.

While the STOXX, DAX and CAC40 are set to rise, ending January on a positive note, the FTSE

100 is on track to fall further with futures down 0.2 percent. A rising pound could be piling

extra pressure onto the British index.

(Helen Reid)

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WEAK DOLLAR WOES FOR INFINEON (0657 GMT)

In an early sign the weak dollar could be a strain on some European companies, particularly

those reliant on exports, chipmaker Infineon just cut its 2017/18 revenue guidance,

blaming the greenback's weakness.

The stock is indicated down 1.9 percent in pre-market trade.

(Helen Reid)

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RESULTS WATCH: SIEMENS STRUGGLES, ARCELORMITTAL RESUMES DIVIDENDS (0641 GMT)

Results are rolling in thick and fast today from industrials as well as several banks.

German engineering group Siemens reports a fall in quarterly industrial profit

due to continued weak demand from the power and gas sector. Profit was in line with analysts'

forecasts, but profit margin shrank.

Interestingly the group says it got a net 437 million euro benefit from U.S. tax reforms in

the first quarter.

The world's largest producer of steel, ArcelorMittal, was more upbeat, with profit

ahead of expectations and resuming dividend payments after skipping them for 2015 and 2016. The

$0.10 payout undershoots analysts' expectations of $0.30, though.

A slew of banks reporting today as well, with ING's Q4 profit missing expectations

while Sweden's SEB raises its dividend after strong results. Meanwhile impairments in

its U.S. unit dented Santander's numbers.

The pressure's on for European banks, a leading sector in this year's rally, to deliver

convincing results, so it'll be interesting to see how banking shares react today.

Also in results to watch today, especially considering the tech rally after AMS results

earlier this week, will be chipmaker Infineon. More on that soon.

(Helen Reid)

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MORNING CALL: EUROPEAN STOCKS TO RECOVER (0619 GMT)

Good morning and welcome to Live Markets.

Looks like European stocks could recover slightly today after suffering their biggest daily

loss since November yesterday in a global risk-averse turn. Only the FTSE is seen edging

slightly further down, having sunk to five-week lows yesterday as miners and banks tumbled.

Overnight Asian stocks lost further ground, falling from their record highs as the global

rise in bond yields weighed on equities. The dollar found some support, however, ahead of the

Federal Reserve's policy decision.

Spreadbetters call the DAX 25 points higher at 13,222.1, the CAC 40 up 8 points at 5,481.7,

and the FTSE down 4 points at 7,584.3.

(Helen Reid)

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