LIVE MARKETS-European stocks extend losses as Wall Street slides

June 25 - 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 STOCKS EXTEND LOSSES AS WALL STREET SLIDES (1444 GMT)

It didn't start well and it sure took a turn for the worse after Wall Street opened in the

red, especially the Nasdaq (now down 1.7 percent).

The FTSE is facing its worst loss since the sell-off of early February with a 2 percent

fall and the DAX is also sustaining heavy losses, down 1.8 percent.

Sector indexes for basic materials, tech, oil, travel and leisure and car makers are all

down over 2 percent.

(Julien Ponthus)

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IFO-RGOT ABOUT #EUROBOOM (1335 GMT)

On the bright side, Ifo's German business climate reading for June was slightly better than

expected, on the downside, the #Euroboom narrative is officially dead with the DAX posting the

worst performance in Europe with a 1.7 percent fall.

"The boom is over," Ifo economist Klaus Wohlrabe told Reuters, noting that trade war fears

were taking their toll.

Oxford Economics took the same view: "We see no reason to change our view that the Eurozone

economy is past its growth peak," adding that "with U.S. President Trump’s renewed threat to

impose tariffs on US car imports we fear that expectations are in for another fall in July."

Important to note that trade is not the only thing German business leaders need to worry

about even if, for the exporter-heavy DAX, it is no laughing matter.

"Even (Taiwan OTC: 6436.TWO - news) though trade is often cited as the number one risk to the German economy, we tend to

see domestic politics as a much bigger risk," ING writes while Berenberg analyst Holger

Schmieding stresses the danger of a fall-out between the center-right CSU and Merkel's CDU.

"The risk that rash behaviour on either or both sides of the worst CDU-CSU dispute ever

could topple Germany’s current government is serious", he warns.

Here's an ING tweet trying to find silver linings in Germany's last minute win against

Sweden Saturday night:

(Julien Ponthus)

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PESSIMISM OVER EUROPE'S AUTOS AND LUXURY STOCKS GROWS (1252 GMT)

Kepler Cheuvreux strategist Christopher Potts downgraded Europe's autos and luxury stocks in

the latest sign of investors' mistrust of European exporters exposed to tariffs and China in a

febrile environment of increasing protectionism.

On autos, Potts thinks that "a 20 percent tax on U.S. auto imports would remove entirely the

profitability of exporting to the USA." Accordingly autos stocks should have a hefty risk

premium attached to them, and he downgrades them to underweight.

He does, however, reckon the sector will be a buy once the tariff damage is clear. Some

brave investors could even be jumping in now...

Luxury stocks - which he reckons are Europe's "most emblematic and successful counterpart of

America’s Nasdaq (Frankfurt: 813516 - news) " are also too risky as they're too expensive and crowded. The sector index hit

a record high as recently as June 6, and has seen strong earnings upgrades (see below) until a

recent dip on trade fears.

"From this time we should no longer assume that company exposure to emerging markets,

including China, gives rise to market out-performance," writes the strategist.

Downgrading consumer goods and apparel from overweight to neutral, Kepler upgrades consumer

services from underweight to neutral in a defensive move from international to more domestic

exposure. Another protective move is an upgrade to utilities to add to the broker's positive

recommendation on healthcare.

It'll be interesting to see how many more brokers turn more defensive as the trade war

picture crystallises.

(Helen Reid)

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A CEILING FOR BLOCK TRADES? (1204 GMT)

The proportion of block trades in dark trading (off exchanges) overall in Europe has stayed

near flat from last week - 43.87 percent on Friday 22 from 43.69 percent on the 15th, according

to Fidessa figures.

Block trading has grown in leaps and bounds since MiFID II was implemented in January, and

even more so since dark pool caps were introduced in March, but it has moderated somewhat

recently, as the latest figures show, suggesting there may be a natural upper limit to the

proportion of dark trading which can be done in large blocks.

The LSE's dark block platform Turquoise Plato had the highest turnover this week with 1.51

billion euros traded, while Liquidnet executed 1.39 billion and Posit 1.22 billion.

Turquoise Plato's market share has been rising steadily since January, as has Cboe's Large

in Scale platform, at the expense of Liquidnet.

(Helen Reid)

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AUTOS TARIFFS COULD DIVERT FOCUS FROM CHINA (1107 GMT)

The STOXX has just hit a session low, on track for its worst day in a month as investors

continue to price in a bigger tariff impact than they previously expected. There's a wealth of

notes out there today calculating, speculating and otherwise ruminating about how far a trade

war could go, and how big a dent it could make.

On autos in particular Trump has ramped up the rhetoric recently, with his Friday afternoon

tweet the latest indication of his intent to hike tariffs on U.S. auto imports.

There's a U.S. Department of Commerce investigation already underway on this, and UBS

analysts offer their forecast of what is to come: "We expect this investigation - and the

resulting tariffs - to follow the play-book of steel tariffs: exemptions for those countries

willing to negotiate concessions." They see Canada, China, Mexico and the EU as likely to be hit

with tariffs.

Interestingly, they reckon the autos fixation could be a distraction from further escalation

with China - good news for Shanghai stocks, but not for the DAX, where Daimler (IOB: 0NXX.IL - news) , Volkswagen (IOB: 0P6N.IL - news) ,

Continental (IOB: 0LQ1.IL - news) and BMW (EUREX: BMWE.EX - news) are the biggest drags once again today.

"We do not think the administration is quite ready to impose the next tariffs on $200

billion in additional Chinese goods," writes UBS (LSE: 0QNR.L - news) . "The shift in focus from China to autos could

move attention and negotiating capacity to autos, making escalation with China less likely."

Autos stocks are set for their 7th straight day of losses. Below you can see their sharp

falls to 9-month lows:

(Helen Reid)

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TRADE-SENSITIVE STOCKS DENTED (0847 GMT)

All the sectors most sensitive to global trade are selling off sharply this morning. Autos,

banks, resources and tech are the worst-performing after the U.S. reportedly prepared to slap

more tariffs on China specific to tech stocks.

"It does seem to us that the time has probably come whereby all things very exposed to

global trade flows will begin to underperform perhaps quite sharply," writes Neil Campling,

co-head of the global thematic group at Mirabaud Securities.

"The global semiconductor industry is highly exposed to the fallout of trade wars," he adds.

Indeed, semiconductor stocks are among the worst performing today, with STMicro,

ASML (Milan: ASML.MI - news) , Siltronic (IOB: 0R8P.IL - news) and BE Semiconductor falling 2.9 to 4.1 percent.

Meanwhile Countrywide is sinking 22 percent, bottom of the FTSE small-caps, after its profit

warning.

WHAT'S ON THE RADAR FOR THE OPEN (0651 GMT)

The latest episode in an ongoing trade dispute between the U.S. and other major economies is

set to send European shares further into a funk on Monday with benchmark futures showing losses

of 0.2 to 0.7 percent.

A report that U.S. President Donald Trump plans to bar many Chinese companies from investing

in U.S. technology firms and block more tech exports to Beijing was likely to weigh on tech

stocks, while oil stocks were also likely to be a weight as crude prices fell back after

Friday’s OPEC meeting.

While investors and analysts are hand-wringing over a building trade war, JP Morgan

strategist Mislav Matejka offers his more optimistic view that the prospect of market falls and

a hit to corporate confidence ahead of the November elections could pull the U.S. administration

back from the brink.

In company news Roche is seen rising 1 percent after announcing its Tecentriq drug cocktail

boosts survival in small cell lung cancer. Analysts at Baader Helvea saw the positive study

results likely adding $1.5 billion peak sales revenues to Tecentriq.

Italian cable maker Prysmian (EUREX: 3056144.EX - news) is seen down 5 to 7 percent at the open after it cut its

guidance due to additional expected costs related to issues with its UK WesternLink undersea

cable project.

M&A continues with IWG (LSE: IWG.L - news) confirming it received an approach from Terra Firma, joining the bid

battle for the workspace firm. Its shares are seen rising up to 5 percent at the open.

Britain’s largest real estate agent Countrywide (Frankfurt: A1H56R - news) meanwhile added to a host of UK companies

warning on profits and was indicated by some traders down at least 10 percent.

In other company news and potential stock movers:

Italy's Prysmian sees 50 mln euros in extra costs from WesternLink issues;

Polar Capital (LSE: POLR.L - news) 's annual pre-tax profit doubles;

Britain's IWG confirms evaluating possible Terra Firma bid;

Countrywide lowers profit forecast, plans more equity financing

(Helen Reid)

FUTURES POINT TO FEEBLE START (0616 GMT)

Futures have opened down 0.2 to 0.7 percent, indicating a weak start to trading for European

benchmarks after the U.S. ramped up threats of trade barriers, this time targeting the

technology sector which has been among the strongest drivers of global equity markets.

JP Morgan's strategist Mislav Matejka strikes an optimistic note about the likely brakes on

an all-out trade war: "It is difficult to handicap trade risk, but the prospect of market falls

and a dent to corporate confidence in the run-up to November elections might prevent the U.S.

administration from actually implementing these policies."

He does, however, note that some of their trades (a positive call on DAX, an overweight

cyclicals versus defensives, and overweight exporters versus domestics) could be on shaky ground

if things escalate further.

(Helen Reid)

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EARLY MORNING HEADLINE ROUND-UP (0540 GMT)

In company news, we've got Roche trial results, some M&A news around IWG, and luxury brand

Lalique starts trading on the SIX Swiss exchange. In macroeconomic data we're awaiting the Ifo

business confidence reading from Germany. And everyone's worrying about trade.

"The U.S. is likely to announce new China trade restrictions by June 30 to address its

concerns about intellectual property rights," write Societe Generale (Swiss: 519928.SW - news) analysts.

Here's your headline round-up:

Roche's Tecentriq cocktail boosts survival in small cell lung cancer

Premier Foods (Frankfurt: A1JWNB - news) investor calls for immediate removal of CEO

Terra Firma approaches IWG about joining bid battle for offices firm - sources

VW may seek damages from ex-CEO Winterkorn over dieselgate

Final Lalique shares from capital hike placed at 40 Sfr

Trump greets EU trade reprisals with threat of steep auto tariff

EU to respond to any U.S. auto tariff move - report

(Helen Reid)

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TRADE TENSIONS TO DEAL ANOTHER BLOW TO EUROPEAN SHARES(0528 GMT)

Europe's stocks are set to extend Friday's fall as investors price in a further escalation

in trade tensions after a report that President Trump plans to bar many Chinese companies from

investing in U.S. technology firms and block additional technology exports to China.

Asian shares fell overnight on escalating trade tensions while oil prices gave up some of

their hefty gains made after major oil producers agreed to a modest increase in production.

The tech sector will be one to watch for any impact from the news of potential technology

investing barriers, while oil and gas stocks are likely to track crude prices lower after a

sharp rally on Friday.

Spreadbetters expect the FTSE 100 to open 35 points lower at 7,647, the DAX to open 63

points lower at 12,517 and the CAC 40 to open 30 points lower at 5,357.

(Helen Reid)

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