LIVE MARKETS-European stock futures surge

* Futures up 1.1 to 1.8 pct

* Wall Street, Asia surged on China-U.S. trade talks

March 27 - 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 STOCK FUTURES SURGE (0610 GMT)

Futures for the major European stock markets have opened sharply higher, rising 1.1 to 1.8

percent with the DAX in the lead, as investors place bets on a strong bounce at the open.

Meanwhile analysts are still mulling what caused the late-afternoon slump in shares

yesterday. Here's Peel Hunt strategist Ian Williams:

"The trigger was not immediately obvious with neither further strength in the euro, or the

latest wave of Russian diplomatic expulsions, especially convincing reasons for such a move. A

more worrying interpretation is that investors may be taking advantage of even the most modest

of rallies to lighten their equity exposure."

If Williams is right we may see a volatile session today as well - but for the moment all

signs are pointing to a strong rebound for the European market.

(Helen Reid)

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BULLS TO KEEP THE UPPER HAND (0548 GMT)

Goldman Sachs (NYSE: GS-PB - news) ' Bear/Bull indicator is above 70%, a level normally associated with an

imminent bear market (see below). But the GS team led by Peter Oppenheimer reckons relatively

attractive equity valuations will protect markets from a big drawdown, at least for now.

There's also a wide spread in the underlying variables behind the indicator: very low levels

of unemployment and strong growth momentum are normally accompanied with "tighter monetary

policy, a flatter yield curve and rising core inflation," notes GS. "But these remain subdued

and without these risks rising, the prospect of a recession and 'cyclical' bear market is low."

Valuation meanwhile is becoming less of a risk, they add - the forward consensus PE for the

MSCI AC World is back to its 1990 average and below its average excluding Tech stocks. High

valuations are mostly confined to the U.S. market.

Furthermore, free cash flow yields have increased along with P/E ratios, and the total cash

return from equities (dividend yield + buyback yield) has risen in most markets.

So the overall message from GS is: don't panic! The bulls will prevail, at least for now...

(Helen Reid)

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MORNING CALL: EUROPEAN STOCKS TO BOUNCE BACK STRONGLY(0520 GMT)

Good morning and welcome to Live Markets.

Risk appetite is back! European stocks are called to open strongly higher today after a weak

close yesterday. They're being pushed up by the equities rally on Wall Street and in Asia

overnight greeting news that the U.S. and China are holding behind-the-scenes trade talks.

White House officials are asking China to cut tariffs on imported cars, allow foreign

majority ownership of financial services firms and buy more U.S.-made semiconductors, according

to a person familiar with the discussions.

Asian shares bounced back overnight with the Nikkei up 1.7 percent and Chinese blue-chips

gaining 1.2 percent. The gains came after a stellar session on Wall Street with the Dow

delivering its third-biggest point gain ever, jumping 2.8 percent, while the S&P 500 gained 2.7

percent and the Nasdaq (Frankfurt: 813516 - news) surged up 3.3 percent.

A negative currency effect could weigh on European stocks today, though, with the euro still

near the six-week high against the dollar it touched yesterday. It had its biggest one-day

percentage gain since June 2017 yesterday.

Spreadbetters call the DAX 183 points higher at 11,971, the CAC 40 up 60 points at 5,127,

and the FTSE 100 78 points higher at 6,966.

(Helen Reid)

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