LIVE MARKETS-What you need to know at the open

Welcome to the home for real-time coverage of European equity markets brought to you by Reuters

stocks reporters and anchored today by Josephine Mason. Reach her on Messenger to share your

thoughts on market moves: josephine.mason.thomsonreuters.com@reuters.net

WHAT YOU NEED TO KNOW AT THE OPEN (0659 GMT)

European stocks are expected to open slightly higher as investors continue to draw comfort

from the European election results, news of Renault-Fiat tie-up talks and take a breather from

the U.S.-China trade tensions.

Futures are off their earlier highs but are up between 0.1-0.3%, extending yesterday’s

gains.

Still there may be further pressure on Italian banks and the Milan bourse amid fresh worries

over a clash between Rome and Brussels over Italy's budget. The index and sector were knocked

lower yesterday after news that the European Commission is considering taking disciplinary

action next week for the country's failure to rein in its budget.

The Greek PM’s call for a snap election, which sent stocks soaring yesterday, and Austria’s

deepening political crisis, which pushed Vienna stocks lower, will continue to draw investor

attention to smaller euro-zone markets.

News that may send shivers through some major sectors: KLP, Norway's largest pension fund,

has said this morning it has sold about $320 million of shares in gambling and alcohol companies

and has added the sectors to its exclusion list.

Among the excluded companies are casino group Wynn Resorts, online gambling firm

Betsson, spirits and beer maker Diageo and brewers such as Carlsberg

and Heineken.

While the value is relatively small on a per-company basis, the move is the latest sign that

some pension funds and big investors are giving greater scrutiny to how companies they invest in

make their money.

In dealmaking, Galliford shares are expected to jump after news broke that Bovis approached

the UK house builder about a possible bid. Galliford rejected the move, but the potential

dealmaking may inject some action into the UK housebuilder sector, which has been hammered by

worries about the damage from the country's protracted and chaotic Brexit.

(Josephine Mason)

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European stock future are signalling a strong open as investors continue to draw comfort

from the European election results, news of Renault-Fiat tie-up talks and a dearth of major news

on U.S.-China trade tensions. Futures are off their earlier highs but are up between 0.1-0.3%.

There may be more pressure on Italian banks which were hit yesterday amid fresh worries over

a clash between Rome and Brussels over Italy's budget after news that the European Commission is

considering taking disciplinary action next week for the country's failure to rein in its

budget. That wiped out Milan's Fiat-Renault induced gains.

Another piece of news that may send shivers through some major sectors: KLP, Norway's

largest pension fund, has said this morning it has sold about $320 million of shares in gambling

and alcholol companies and has added the sectors to its exclusion list.

Among the excluded companies are casino group Wynn Resorts, online gambling firm

Betsson, spirits and beer maker Diageo and brewers such as Carlsberg

and Heineken.

While the value is relatively small on a per-company basis, the move is the latest sign that

pension funds and investors in general are scrutinising their investments more.

A takeover move by Bovis for Galliford may inject some action into the UK housebuilder

sector, which has been hammered by worries about the damage from the country's protracted and

chaotic Brexit. Galliford's shares are seen rising on the news.

ON OUR RADAR: GAMBLING AND BOOZE (0619 GMT)

Relief about the European election results, news of the Renault-Fiat tie-up talks that also

boosted Asian carmakers overnight and a lack of major news on the U.S.-China trade conflict are

lifting European stocks. The major stock futures are showing decent gains, all up between

0.4-0.5% and Wall Street futures are indicating a positive open.

Data just out may put a dampener on things: the GfK consumer sentiment indicator showed

German consumer morale cooled heading into June to its lowest level in more than two years as

shoppers became less willing to buy and more downbeat about the growth outlook of Europe's

largest economy.

It's relatively quiet so far on the corporate news front.

One piece of news that stands out so far and may send shivers through some major sectors,

KLP, Norway's largest pension fund, has said this morning it will no longer invest in gambling

companies and alcohol makers.

Among the excluded companies are casino group Wynn Resorts, online gambling firm

Betsson, spirits and beer maker Diageo and brewers such as Carlsberg

and Heineken.

In dealmaking, Vivendi's pay-TV group Canal Plus says it will buy European rival M7 for

about 1 billion euros ($1.1 billion) from private equity firm Astorg in a bid to boost its

European reach.

More headaches for German banks as regulators will require the country's banks to set aside

more provisions from July to cover risks stemming from a pumped up domestic property market and

slowing economy, a move criticised by the sector.

Headlines so far:

Aviva eyes split of UK business as part of shake-up - FT

Britain's Galliford rejects Bovis Homes bid for home building arm

Cash stays king as nervous investors stash dough ahead of summer lull

UBI Banca investor group nearly doubles stake to 6.94%

Norway's KLP bans alcohol, gambling investments from pension funds

Vivendi's Canal Plus to buy M7 for 1 bln euros to expand its European reach

China's Baoshang Bank takeover raises contagion fears

Alibaba plans $20 bln HK listing, biggest follow-on sale in 7 yrs -sources

EXPLAINER-Will China dump U.S. bonds as a trade weapon? Not so fast

EXCLUSIVE-IKEA to revamp app as store strategy shifts

(Josephine Mason)

*****

EUROPE SEEN FIRMER (0521 GMT)

European stocks are expected to open higher again today, extending yesterday's gains and

taking their cues from Asian stocks overnight as investors take a breather from the U.S.-China

trade tensions.

"The markets are pausing for breath from the trade tensions story but this should change as

we move towards the G20 where hopes of a resolution should intensify," says Jasper Lawler, head

of research at London Capital Group.

There may be some residual impact from the European election results yesterday and turnover

will be higher as the UK and U.S. return from bank holidays.

Investor focus will remain firmly on Italy amid renewed tensions over the country's budget

deficit that slammed banking stocks yesterday. That followed news yesterday that Brussels is

considering taking disciplinary action next week for Rome's failure to rein in its budget,

wiping out Milan's gains driven by the Fiat-Renault tie up news.

Financial spreadbetters IG expect London's FTSE to open 28 points higher at 7,306,

Frankfurt's DAX to open 19 points higher at 12,091, and Paris' CAC to open 5 points higher at

5,342.

(Josephine Mason)

*****

(Reporting by Danilo Masoni, Helen Reid, Josephine Mason and Thyagaraju Adinarayan)