LIVE MARKETS-Closing snapshot : party like it's 2017

* European stocks rise, FTSE touches record

* Euro zone services PMIs show growth near best in 7 years

* Heavily-shorted Debenhams (Frankfurt: D2T.F - news) sinks after profit warning

* Autos cruise to two-month peak

Jan 4 (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

CLOSING SNAPSHOT : PARTY LIKE IT'S 2017 (1710 GMT)

Last year’s global equity market boom seems to be accelerating in 2018 with more records and

milestones falling around the planet and in historically low volatility. Today the FTSE 100

touched an all time high and the STOXX 50 had its best day since April 2017. Here's how it

looked like at the close, see you tomorrow:

(Julien Ponthus)

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"CEASE AND DESIST": AN AMUSING MIFID II TALE (1606 GMT)

As sell-side and buy-side alike adjust to the first few days of a new research regime, some

missteps are to be expected. Here's a revealing anecdote courtesy of our colleague Sujata Rao

who just met with an emerging market banks analyst.

He sent out a research note this morning, forgetting which clients he had signed the MiFID

II contract with - and got some 15 angry email replies from fund managers who said they would

get into trouble with regulators if he continued to email them research.

One even reportedly asked him to "Cease and desist"!

(Helen Reid)

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EASY TIGER! EURO ZONE BANKS SURGE POSES TIMING DILEMMA (1556 GMT)

Euro zone banks are set to post their best day since June, rising 2.6 percent as buoyant

economic data released today makes them more than ever an attractive proxy to play the

"Euroboom" trade.

"If I were an investor, this would pose a dilemma," a bank analyst just told us, noting that

with an average book value of 0.85, euro zone lenders are trading at very attractive levels.

"It's a great entry point for investors," he said, but cautioned that he would be careful

not to invest too soon: interest rates are not seen rising in the short term and the super low

volatility on the markets is bound to have hurt investment banks in Q4.

(Julien Ponthus)

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THE UPBEAT MOOD SPREADS TO WALL ST AS EUROPEAN STOCKS RALLY (1513 GMT)

The gains keep coming as Europe's STOXX 600 index touches a two-month high and Wall St opens

in positive territory.

The S&P 500 has hit a record high, while the Dow has surpassed the 25,000

level for the first time ever.

(Kit Rees)

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2017 WAS A GOOD YEAR FOR GLOBAL INVESTMENT BANKING FEES (1429 GMT)

Fees from global investment banking hit a record high in 2017, according to Thomson Reuters (Dusseldorf: TOC.DU - news)

data.

Last year global IB fees totalled $103.9 billion, a 16 percent increase on the previous year

and the highest annual total since our records began in 2000.

Japan saw a cool 50 percent increase in fees, hitting an all-time record of $5.5 billion

(Kit Rees)

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SWITZERLAND'S BLUE-CHIP INDEX NEARS ALL TIME HIGH (1416 GMT)

It may not be for today but at 9513.52 points, the SSMI is only 35 points or about

0.3 percent from breaking its June 2007 record of 9548.09 points.

Here's how close it looks:

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THOUGHT OF THE DAY: IF 2017 WERE A FUND, IT'D BE IN TROUBLE (1316 GMT)

From SocGen's Andrew Lapthorne's research piece "The year-end numbers from the year

volatility died":

"Not only did global equity markets perform well during 2017 (MSCI World delivered a total

return of 20.1%), but they did so with such low volatility and consistency that if this were a

fund, it would perhaps merit a visit from the authorities to check exactly what you were up to!"

(Julien Ponthus)

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DON'T WORRY ABOUT THE FLAT U.S. YIELD CURVE (1240 GMT)

"U.S. recessions have usually occurred after the yield curve has been as flat as it is now,

but the lags have typically been long and variable, suggesting that it would be unwise to expect

a U.S. recession soon", says Oxford Economics' Ben May.

Here's his chart showing we may yet have time ahead of us before a recession given the

limited time the U.S. 10-year yield has been less than 50bp higher than the two-year yield:

(Julien Ponthus)

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MIDDAY UPDATE: EURO ZONE STOCKS SHOOT TO 2-WEEK HIGH (1230 GMT)

It looks like the optimism spurred by the PMIs is giving Euro zone indexes a kick higher,

with Euro stoxx up more than 1 percent at a 2-week high, and Euro zone blue chips

at their highest in a week.

Unsurprisingly, it's the cyclical sectors which continue to dominate: construction stocks,

autos, banks and big oil.

Here's your midday snapshot:

(Kit Rees)

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YES TO CYCLICAL EXPOSURE, BUT EUROPEAN BANKS NOT A SIMPLE 'BUY' (1212 GMT)

As the PMIs showed, the economic backdrop in Europe is strong and, along with other factors,

suggests that now is the time to get some cyclical exposure, says UBS (LSE: 0QNR.L - news) .

European banks could be a candidate, given that they look cheap relative to the market.

But UBS argues it's not as straightforward as that.

"Top down arguments around European macro recovery and rising rates are persuasive but look

played out we think in (banking) stocks most geared to these trends," UBS analysts wrote in a

note.

"If equity markets don't go higher, owning cheaper stocks will have been the righ call," UBS

adds.

(Kit Rees)

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LOOKING FOR AN EXCUSE TO CORRECT? (1115 GMT)

A December survey of 54 institutional investors conducted by Managing Partners Group showed

that slightly over 7 out of 10 expect a global equity correction of over 10 percent within 18

months.

"Equities are looking highly valued on both sides of the Atlantic (Shanghai: 600558.SS - news) and it looks as though the

market is just looking for an excuse to correct", Jeremy Leach, CEO of the investment house

commented in the press release presenting the study.

That being said, IG (Frankfurt: A0EARV - news) 's Chris Beauchamp noted in his morning comments that investors were

quick to buy the dip which emerged during Europe's first trading days:

"Dip buyers clearly know an opportunity when they see one, and with weakness so widespread

across the continent's markets there was an opportunity to pick up some bargains, which at least

makes a nice change from chasing the bull run on Wall Street".

(Julien Ponthus)

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EUROBOOM! (déjà vu) (1048 GMT)

The strong PMI data realeased this morning seems to confirm that the "Euroboom" trade is

here to stay in 2018.

"We continue to believe that the outlook for European equities is positive, aided by the

potential for close to ten percent earnings growth in 2018", JPMorgan AM's Mike Bell commented.

That's in sharp contrast to the likes of SocGen (Paris: FR0000130809 - news) who don't see much "meat on the bone" for

the old continent's stocks.

Actually, thinking about it, the first trading days of the year are starting with a "déjà

vu" feeling with regard to the dynamics of the bulls : global synchronised growth anyone?

To read how the Euro zone economy's posted its best growth in seven years click

And here's a celebratory kiss:

(Julien Ponthus)

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PAY DAY FOR DEBENHAMS SHORTS (1013 GMT)

Yesterday's rise in Next (Frankfurt: 779551 - news) and other retailers sure tested the conviction of investors who

have shorted the likes of Debenhams for months in the hope of a downfall.

With (Other OTC: WWTH - news) its profit warning triggering a fall of over 16 percent today to its worst price since

the peak of the 2008 financial crisis, Debenhams, which is the second most-shorted stock on the

FTSE, is delivering for speculators.

Note (Stockholm: NOTE.ST - news) that brokers such as Investec (LSE: INVP.L - news) think things could still get worse, with the latter

cutting its target price to 28 pence, below its already depressed level of 29.88 pence.

According to Reuters calculations, Debenhams’ share price fall netted profits of around 12

million pounds on Thursday for hedge funds which have short positions totalling 14.3 percent of

the company's stock.

You can see how much Debenhams has fallen here:

(Julien Ponthus and Alasdair Pal)

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EUROPEAN AUTOS CRUISE TO TWO-MONTH PEAK (0930 GMT)

The European autos sector has had a strong start to the year, up 1.2 percent this

morning at a two-month peak.

Today's move is being driven by yesterday's U.S. auto sales data for December. While not

stellar, the figures did beat analyst expectations, with the likes of Fiat Chrysler up

around 4.1 percent at a record high today.

While the autos sector had a tepid first half in 2017, things have really started to pick

up over the last six months. Fiat (Hanover: FIA1.HA - news) , Porsche and Volkswagen (IOB: 0P6N.IL - news) are among the

biggest gainers over that period.

(Kit Rees)

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OPENING SNAPSHOT: EUROPEAN SHARES CLIMB, FTSE HITS FRESH RECORD HIGH (0815 GMT)

It's a positive start to the trading session for European equities, with almost all sectors

higher.

Cyclical sectors, such a financials and commodities, are adding the most to gains, and in

turn have pushed Britain's FTSE 100 to a new high.

Away from the STOXX 600, Debenhams is down 20 percent.

Here's your opening snapshot:

(Kit Rees)

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PRE (Shanghai: 600048.SS - news) -OPEN ROUNDUP: WHAT'S ON THE RADAR (0746 GMT)

Futures are pointing to a stronger open for European stocks on Thursday after investors’

rising risk appetite drove Asian shares to a 10-year peak and oil prices surged further.

Germany’s exporter-heavy DAX is likely to benefit from the U.S. dollar’s recovery

and continued strength in cyclicals, and services PMIs today which SocGen analysts forecast will

confirm the region’s sustained growth.

One stock to watch will be UK department store Debenhams, indicated down 25 percent after a

profit warning – in stark contrast to Wednesday’s strong update from Next, this will come as a

blow to the British retail sector and likely hobble the previous session’s rally.

In other company news and potential stock movers:

Novartis (IOB: 0QLR.IL - news) ' Promacta receives FDA breakthrough designation for new indication;

British retailer Debenhams warns on profit after disappointing trading;

Saga (Frankfurt: 2S8.F - news) restructures travel business after cutting profit forecasts;

Aldi UK's December sales up over 15 pct

(Helen Reid)

*****

DEBENHAMS TO SPOIL THE XMAS PARTY?

Yesterday the mood around UK retailers was pretty positive after Next reported

better-than-expected Christmas sales. But this doesn't seem to have been the case with small cap

peer Debenhams, which has issued a profit warning.

Traders are calling Debenhams' shares down 25 percent, so it could be payday for those

shorts.

Debenhams' commentary in its Christmas update isn't exactly encouraging: "The early weeks of

the quarter were disappointing as the market remained volatile and competitive."

The retailer said that the first week of the post-Christmas sale was "below expectations".

Debenhams' shares were down nearly 40 percent in 2017:

(Kit Rees)

*****

FUTURES OPEN HIGHER AS CYCLICAL RALLY SET TO CONTINUE (0709 GMT)

Futures have opened higher across the board with the DAX leading the way as a rally in

cyclicals is set to continue and the dollar's recovery takes the pressure off European exporting

companies.

Here's your snapshot:

*****

SERVICES PMI TO CONFIRM EURO AREA ECONOMY'S MOMENTUM (0655 GMT)

SocGen analysts see today's PMI data dump on euro area services growth as likely to confirm

the earlier flash estimates, but UK data will continue to weaken slightly, they predict.

Overall they're pretty positive on how risk appetite has fared this first week of the year.

"Risk is 'on', oil and commodity prices are strong, and the dollar is set to weaken further,

albeit not in a straight line," they write.

EUROPEAN SHARES SEEN RISING AFTER ASIAN STOCKS HIT 10-YEAR PEAK (0633 GMT)

Good morning!

Financial spreadbetters see European stocks rising on Thursday, taking their cue from Asian

markets which hit a 10-year peak overnight as strong economic data from the U.S. drove equities

and also helped the dollar recover from its swoon at the start of the week.

London's FTSE is seen opening 13 points higher, flirting ever closer with its recent record

high, Frankfurt's DAX is to open 65 points higher, and Paris' CAC is predicted to rise 25

points.

Likely to support trading once again today is oil as crude prices hit fresh 2 1/2 year highs

with tensions in Iran tightening supply.

(Helen Reid)

*****

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