LIVE MARKETS-Positive thinking: battered European shares now "very attractive"

LONDON, March 28 (Reuters) - Welcome to the home for real-time coverage of European equity

markets brought to you by Reuters stocks reporters and anchored today by Danilo Masoni. Reach

him on Messenger to share your thoughts on market moves:

danilo.masoni.thomsonreuters.com@reuters.net

POSITIVE THINKING: BATTERED EUROPEAN SHARES NOW "VERY ATTRACTIVE" (1001 GMT)

Always look on the bright side of life! Sure, European shares are down over 6 percent since

the beginning of the year but that makes some of them look like a bargain for investors

determined to invest in the stock market despite the current turbulence.

"Post the recent moves, Europe's absolute valuations are looking very attractive", reckons

Morgan Stanley (Xetra: 885836 - news) in a strategy note this morning.

The broker notes that stocks on the old continent have hit a number of thresholds which

could make them look cheap in the eyes of stock pickers looking to "buy the dip".

Among European shares, Morgan Stanley is looking for opportunities among defensive stocks

and in particular, those which have seen analysts positively revise their earnings per share.

The broker identified Ipsen, Novartis (IOB: 0QLR.IL - news) , Anheuser-Busch Inbev and Enel (LSE: 0NRE.L - news) in this group.

Stocks with strong balance sheets and high dividend yields are also seen as a good option. A

few examples? Among financials, MS likes Aviva (Other OTC: AIVAF - news) , Caixabank (Amsterdam: CB6.AS - news) , Danske Bank (LSE: 0NVC.L - news) or BNP Paribas (LSE: 0HB5.L - news) , Orange (LSE: 0OQV.L - news) or

Deutsche Telekom (IOB: 0MPH.IL - news) for telecoms and Enel and Total (LSE: 524773.L - news) for energy.

It's also worth "screening for cheap UK stocks with high global exposure", strategists add,

naming among other stocks British American Tobacco (Kuala Lumpur: 4162.KL - news) , Shire (Xetra: S7E.DE - news) or Randgold.

Here's a chart showing how European shares are valued under their long-term average:

(Thyagaraju Adinarayan and Julien Ponthus)

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EUROPEAN CHIPMAKERS HIT BY SELF-DRIVING CAR WORRIES (0834 GMT)

Top fallers among European tech stocks are chipmakers, from ams to STMicro

and Infineon (Xetra: 623100 - news) , all down between 4 and 9 percent. For IG analyst Alexandre Baradez

that's ultimately linked to growing worries over self-driving cars.

"As concerns semiconductors, the fear comes from the environment of bad news that is

accumulating around the functioning and testing of autonomous vehicles, with a particular focus

on the bad news on Tesla: investigation by the NTSB of the crash and the delay in deliveries of

vehicles and the recent downgrade note from Moody's," he says.

More broadly on tech, Baradez also raises the issue of stretched valuations.

"The market is realizing that a stock like Facebook (NasdaqGS: FB - news) can lose more than 20 percent in a few

days, which throws up questions over the valuation of other big tech names and their sensitivity

to a potential scandal," he says.

On a price to earnings basis, both European and U.S. technology stocks are valued around

their highest level in more than a decade, as you can see in this chart.

(Tom Pfeiffer and Danilo Masoni)

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OPENING SNAPSHOT: EUROPE PAINTED RED (0744 GMT)

European shares have opened down sharply with tech stocks feeling the heat of a sell-off

overnight in their U.S. peers. Although there is no scarcity of negative headlines to explain

the declines in the sector, for UniCredit (EUREX: DE000A163206.EX - news) it's ultimately a matter of high valuations.

"A recent stream of negative news has acted as a trigger for the sell-off in the U.S. tech

sector. But the underlying cause ... is extremely stretched valuation metrics that have

generated a sizeable misalignment with fundamentals, mostly for the big technology stocks," said

UniCredit analysts in a note. "It should not come as a surprise that some negative news would

precipitate a sell-off."

Here's your opening snapshot:

(Danilo Masoni)

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US TECH SELL-OFF SENDS EUROPE'S STOCK FUTURES DOWN 1 PCT (0605 GMT)

It looks that European shares are going to give up most of the gains seen yesterday after

fresh selling pressure hit U.S. tech stocks overnight, offsetting ebbing trade war fears.

Futures on main regional stock benchmarks were trading down around 1 percent.

(Danilo Masoni)

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EARLY MORNING HEADLINE ROUND-UP (0555 GMT)

Nestle (Swiss: NESN.VX - news) , other food groups likely suitors for GSK's Horlicks - sources

Ex-Deutsche Telekom boss favourite to be next Airbus chairman-report

British VW drivers start "dieselgate" claim in High Court

EU regulators look at Volkswagen (IOB: 0P6N.IL - news) 's Luxembourg tax deals -Bloomberg

Telecom Italia (Amsterdam: TI6.AS - news) notifies watchdog on network separation

Italy's watchdog looking into Telecom Italia board resignations -sources

Sky (Frankfurt: 893517 - news) 's Italy unit close to broadband deal with Open Fiber - sources

Louis Vuitton expands French manufacturing to meet handbag demand

Ryanair's Portugal cabin crews to go ahead with Easter strikes

Casino says sale process of Via Varejo (Sao Paolo: R2:VVAR11S.SA - news) unit continuing

Unions at VW's Skoda Auto say latest wage proposal by carmaker not satisfactory

Norsk Hydro (LSE: NHY.L - news) to start shutdown of half Alunorte capacity by mid-April -sources

UK's Capita (LSE: CPI.L - news) to set out new strategy, rights issue on April 26 - source

MEDIA-HSBC froze account linked to alleged $500 million Angolan fraud - FT

Data, mobile money main revenue drivers for Orange in Africa

UAE healthcare provider NMC (Brussels: BE0035966762.BR - news) raises $2 billion loan - sources

Eni (LSE: 0N9S.L - news) sees no problems in Russian gas supply to Italy from political tensions

Metro (Dusseldorf: 62M.DU - news) says to seek new approach to wage deal blockage at Real

Sainsbury (Amsterdam: SJ6.AS - news) 's needs year's notice to act on post-Brexit trade deal

Repsol (Amsterdam: RP6.AS - news) , Premier (BSE: 500540.BO - news) win oil block in last Mexico auction before election

(Danilo Masoni)

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MORNING CALL: EUROPE SEEN LOWER AGAIN (0522 GMT)

European shares are expected to open lower today following a late reversal on Wall Street

overnight when tech stocks came under renewed selling pressure, led lower by shares including

Facebook and Alphabet (Xetra: ABEA.DE - news) , while Twitter (Frankfurt: A1W6XZ - news) tumbled after short-seller Citron Research called the stock

"most vulnerable" to privacy regulations.

While shares fell in Asia too, here are your opening calls for Europe, courtesy of CMC (Shanghai: 600327.SS - news)

Markets:

FTSE100 is expected to open 50 points lower at 6,949

DAX is expected to open 120 points lower at 11,850

CAC40 is expected to open 65 points lower at 5,060

(Danilo Masoni)

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