LIVE MARKETS-Investors still reluctant to buy into oil stocks

* European stocks edge lower

* ZPG hits record after $3 bln takeover deal

* Peers Rightmove, Auto Trader (Frankfurt: 2UA.F - news) also gain

* Sika (IOB: 0QMA.IL - news) jumps after ending dispute with Saint Gobain (LSE: 490580.L - news)

LONDON, May 11 (Reuters) - Welcome to the home for real-time coverage of European equity

markets brought to you by Reuters stocks reporters and anchored today by Kit Rees. Reach her on

Messenger to share your thoughts on market moves: kit.rees.thomsonreuters.com@reuters.net

INVESTORS STILL RELUCTANT TO BUY INTO OIL STOCKS (1007 GMT)

Surging oil prices still don't seem to be enough to tempt investors into oil stocks, Bank of

America Merrill Lynch strategists note in their flows analysis.

Investors remain hesitant to pour their money into the energy sector, as BAML's chart below,

using EPFR data, shows. Flows into energy stocks are pretty timid compared to those into tech

(this week, the figures are $0.2 billion compared with $1.3 billion). Uncertainty over how long

oil prices can stay at these levels, and where they will go from here, is likely to blame (as DB

mentions - see previous post).

The relative performance of U.S. energy stocks to tech stocks, which usually tracks WTI

crude, has been lagging the climb in crude prices, while BAML's oil analyst Francisco Blanch

thinks there's a risk oil could reach $100 a barrel in 2019.

Accordingly BAML strategists advocate investors "buy the secular humiliation" in commodities

whose annualised returns are at historic lows.

Overall they say the market mood has gone "from buy the dip to sell the rip" - and they are

in the latter camp, predicting an "imminent" market peak. The Bull & Bear indicator has fallen

to 4.8, its lowest since January 2017.

(Helen Reid)

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FADING EURO/DOLLAR COULD BOOST EUROPEAN EQUITIES (0925 GMT)

What does the U.S. dollar's recent run up against the euro mean for the region's equities?

It's good news, especially for pharmaceuticals stocks, say Deutsche Bank (IOB: 0H7D.IL - news) analysts.

DB's base case is for the euro's weakening to help European equities outperform the U.S.

marginally over the coming months (3 percent relative upside by end-June) but then underperform

again to mid-September.

"In our tail-risk scenario of further sharp EUR weakness, Europe could outperform by a

further 10 percent by end-June," they add.

Outperformance would be welcome for investors in the region, who've been suffering from a

broad turn away from European stocks. Deflating enthusiasm in the region has driven money out:

this week marks the 9th straight week of outflows, according to Bank of America Merrill Lynch's

flow show.

Pharmaceuticals, which make the bulk of their sales in the U.S., could also stand to gain

from a strengthening dollar, as could Swiss equities (which have a strong healthcare weighting).

"If the bond yield and USD backdrop for pharma becomes more benign, this would point to upside

for Swiss equities," DB analysts argue.

A stronger dollar isn't great for commodity prices, however. DB remains benchmark on

European energy, citing uncertainty about the near-term oil price, and underweight European

mining.

(Helen Reid)

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OPENING SNAPSHOT: ZOOPLA-OWNER ZPG SURGES ON $3 BLN DEAL (0810 GMT)

M&A is the order of the day today, driving some impressive single-stock moves while

benchmarks are rising timidly.

Zoopla-owner ZPG is shooting up 30 percent, top of the FTSE 250, after Silver Lake

agreed a $3 billion takeover of the property ads website, a premium of 31 percent to ZPG's close

on Thursday.

The positive sentiment is driving Zoopla rival Rightmove (LSE: RMV.L - news) up 4.8 percent too, as well

as autos classifieds company Auto Trader.

ZPG's largest shareholder Daily Mail & General Trust, is enjoying an 8 percent

jump.

Swiss specialty chemicals firm Sika, meanwhile, is up 10 percent at the top of the

STOXX after reaching an agreement with Saint-Gobain to end a hostile takeover row.

Healthcare (Shanghai: 603313.SS - news) stocks are the worst performers after a couple of disappointing drug trials.

(Helen Reid)

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WHAT YOU NEED TO KNOW BEFORE THE OPEN (0647 GMT)

Friday might see a calmer end to a busy week but the STOXX 600 is set for its seventh week

of gains in a row – its longest winning streak in over three years.

Also of note is that European stocks have very nearly recovered all of their losses from

February’s volatility shock as we head back to levels last seen at the end of January.

As the Q1 earnings season winds down, it’s not been bad in Europe – not as good as the U.S.,

but good enough to keep shares bobbing along. Blended Q1 yoy earnings growth is coming in at 16

percent for MSCI EMU (in dollar terms), compared with 26 percent for the S&P 500, according to

Thomson Reuters I/B/E/S.

Today’s focus in that space will be Italian banks following updates from Mediobanca (Milan: MB.MI - news) , Monte

Paschi (Milan: BMPS.MI - news) and UBI Banca (Amsterdam: UF8.AS - news) . Despite recent weakness on political jitters, the Italian banking sector

has seen a strong 2018 so far, up more than 13 percent.

And finally the M&A train steams along in the UK with Silver Lake agreeing to buy ZPG

, which owns property websites Zoopla and Primelocation, for $3 billion – we’ll be

watching for readacross to other British property stocks.

(Kit Rees)

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FUTURES RISE AS STOXX CLOSES IN ON 7TH WEEK OF GAINS (0624 GMT)

European stock futures have opened modestly higher, as the STOXX 600 heads for its seventh

week of gains - its longest winning streak since March 2015. For the FTSE 100, seven weeks will

be its longest weekly winning streak in more than 10 years.

Certainly seems like sentiment among equity investors is improving in Europe.

In further company news, UBI Banca joins the flurry of Italian banks reporting

earnings, and AstraZeneca (NYSE: AZN - news) reports its Galathea phase III trial for pulmonary disease drug

Fasenra "did not meet its primary endpoint".

(Helen Reid

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EUROPEAN STOCKS EARLY HEADLINE ROUND-UP (0600 GMT)

In terms of earnings, today is set to be a calmer day, though early on we've had traffic

figures from Air France-KLM (LSE: 0LN7.L - news) and a Q1 update from Portugal's EDP, while it looks like a legal

dispute between Saint-Gobain and Sika has come to an end.

We've also had some figures out from a number of Italian banks, so these will be watched

with interest given the positive reaction to UniCredit (EUREX: DE000A163206.EX - news) 's numbers yesterday and the chunky gains

the sector has seen this year.

Here's a round-up of the early company headlines so far:

Portugal's EDP profit falls on regulatory pressure, forex

Air France-KLM suffers fall in April traffic numbers, blames French strikes

Italy's Mediobanca beats forecasts with Q3 net profit

Monte dei Paschi swings to Q1 net profit of 188 mln euros

ArcelorMittal (LSE: 0NSF.L - news) beats Q1 estimate, bullish on full year

Saint-Gobain to take stake in Sika as construction groups end dispute

(Kit Rees)

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MORNING CALL: EUROPEAN SHARES SEEN OPENING HIGHER (0525 GMT)

Good morning. European stocks are seen rising this morning, according to financial

spreadbetters, following on from a broadly positive session in Asia with equities supported by

easing worries over inflation.

Likewise continued efforts between the U.S. and North Korea to calm geopolitical tensions

have also been well-received by the market. Wall Street closed higher, with Apple (NasdaqGS: AAPL - news) heading

towards a $1 trillion stock market value.

In Europe, spreadbetters expect Britain's FTSE to open 14 points higher, Germany's DAX to

gain 19 points and France's CAC to dip 9 points. And the STOXX 600 is on track for its seventh

week of gains in a row!

(Kit Rees)

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