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LIVE MARKETS-No Santa Claus rally, again?

Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Julien Ponthus. Reach him on Messenger to share your thoughts on market moves: julien.ponthus.thomsonreuters.com@reuters.net NO SANTA CLAUS RALLY, AGAIN? (0918 GMT) It took just a couple of tweets to bring the pre-Christmas rally down to a screeching halt! Trump's tweet on reinstating tariffs on steel and aluminium imports from Argentina and Brazil triggered the downfall. "In the last 24 hours we’ve gone from a potential Santa Claus rally to a more Scrooge-like environment as the ghost of trade wars past came back to haunt the market," Deutsche Bank's Jim Reid says. To make things worse Washington threatened to slap 100% duties on French goods such as Champagne or handbags. That clearly is visible in CAC 40's underperformance today. Speaking of a Santa Claus rally, in the last 5 years, we've had only two positive Decembers (see seasonality chart below). Last year was one of the (Thyagaraju Adinarayan) ***** OPENING SNAPSHOT: KEEP CALM AND CARRY ON (0832 GMT) One thing is for sure, there is no hysteria on European trading floors over the trade war's latest developments: the DAX, the typical barometer on the issue, is up 0.7%. In a nutshell, the bulk of the trade war losses were made yesterday. Traders aren't taking positions indiscriminately: selling is clearly targeted at those companies who could suffer from the Trump's administration desire to punish France for its new digital services tax aimed at U.S. tech companies. So logically on Paris' CAC 40, Hermes, LVMH and Kering are leading the losers. Funny to note that France's luxury groups - the likely target of U.S. tariffs - are a bit to the French stock market what the FANGs are to Wall Street. Both sectors are key to local investors and are used as proxies in the trade war. The only other sectors feeling the heat this morning from the trade war are basic materials, with the sector down 0.8%. This, in turn, is weighing on the FTSE 100 and its big mining groups. (Julien Ponthus) ***** ON THE RADAR: CHAMPAGNE, HANDBAGS AND SPOILS OF TRADE WAR (0747 GMT) With new fronts in Brazil, Argentina, Europe and France, the trade war is likely to be the key driver for this session, especially with Trump in the UK for the NATO summit. After the U.S. threatened to slap punitive duties of up to 100% on $2.4 billion of imports from France on products such as champagne or handbags, French companies such as LVMH, Kering and Laurent-Perrier will be closely watched. Not to say that the war or words could weigh generally on the CAC 40 with junior economy minister Agnes Pannier-Runacher promising France will be “pugnacious”. European stocks could also suffer as a whole after the U.S. said it may set retaliatory tariffs on a wide range of European goods after the WTO rejected EU Airbus subsidies claims. In terms of individual stocks, Italy's biggest bank UniCredit will be under the spotlight after it said it would shed 8,000 jobs to reduce costs by 1 billion euros in Western Europe under a new plan to 2023. Still in Italy, Enel joined a race with at least five other bidders to buy the Renvico wind farm portfolio in Italy and France being sold by a Macquarie-run infrastructure fund. Pre market indications also point out to losses for Cineworld after it issued a warning on full year results. Another one will be Spanish media group Atresmedia which is seen falling at the open after a share placing. (Julien Ponthus) ***** MORNING CALL: TENTATIVE (TECHNICAL?) REBOUND (0630 GMT) There are not many reasons out there for European shares to rise at the open after Wall Street and Asian stock market fell due to Trump's surprise tariffs announcements. One reason though is that after falling 1.6% on Monday, the worst single-day drop in two months, there's probably room for the STOXX 600 to enjoy some kind of technical rebound. According to CMC Markets, London's FTSE 100 is expected to open 14 points higher, Frankfurt's DAX up 60 points and Paris' CAC40 to rise 13 points. (Julien Ponthus) ***** (Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)