LIVE MARKETS-Real estate: What's hot and what's not amid Brexit and trade wars

* European shares higher

* Ericsson (Hanover: ERCB.HA - news) , ASML (Milan: ASML.MI - news) led tech stocks after results

* Banks down as Danske weighs

* Powell: Years of strong jobs, low inflation still ahead

July 18 (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

REAL ESTATE: WHAT'S HOT AND WHAT'S NOT AMID BREXIT AND TRADE WARS (1512 GMT)

We spoke to a real estate equities investor to get their take on how stalling Brexit

negotiations and deepening trade disputes inform their picks of real estate investment trusts

(REITs) across Europe.

Today's ONS inflation stats showed UK house prices had their weakest growth since August

2013 in May.

It's a further sign of strain in Britain's housing market which some connect to Brexit, but

Rogier Quirijns, portfolio manager at Cohen & Steers (NYSE: CNS - news) , says he's been negative on London

residential property for eight years already.

Here are some more nuggets from Quirijns, who runs what's currently the top-performing

European property fund:

- Continental European cities preferred. Berlin is "on fire", he says, for residential

property. While London office market is at a cycle peak, continental Europe is further away:

fund is invested in office space in Madrid, Paris, Oslo and Germany.

- Underweight retail real estate as commercial retail values are being written down with

retailers including Debenhams (Frankfurt: D2T.F - news) and House of Fraser closing stores

- Quirijns backs industrial logistics as a cross-cutting theme in Europe and the UK, which

stands to gain from rising e-commerce

- On UK residential: "If things really get bad, if rents drop, I could invest. If the blood

flows in the streets then I could go back in."

- On trade war: "That is work we are doing right now." Quirijns suggests turning more

towards income investments (like healthcare property) and away from cyclical exposure (like

office space). In the event of car tariffs, he would stick to German residential property but

likely sell German office space due to the country's high dependence on the autos industry

Below you can see UK REITs have significantly underperformed Europe REITs since the Brexit

vote in June 2016:

(Helen Reid)

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UK GOVERNMENT INFIGHTING MAKES NO BREXIT MORE LIKELY (1222 GMT)

The likelihood of no Brexit has risen, while the probability of a soft Brexit has fallen,

Berenberg's economist Holger Schmieding reckons, as the market digests news PM May threatened

pro-EU rebels with a general election this summer.

"If snap elections yielded a Labour-led coalition, the new government may choose to put the

question back to the voters," writes Schmieding.

He ups his estimate of a no Brexit likelihood from 5 to 10 percent, and takes his soft

Brexit estimate from 15 to 10 percent.

A sure sign anxiety over the future of the UK government is rising, opinion polls have

started reappearing in analyst notes. Below, the latest showing Labour gaining the edge over

Conservatives once again.

Fears around Brexit aren't only denting confidence in the UK - analysts are becoming

increasingly pessimistic on Euro zone companies with high UK exposure, HSBC points out in a

note.

(Helen Reid)

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EUROPE'S CAR SECTOR CONFIDENCE HIT AS TRADE TENSIONS RISE (1146 GMT)

Many investors are sticking to their guns and asserting that tariffs haven't caused any

direct damage to the economy yet, and likely won't hurt markets hugely beyond a sentiment

impact.

But UBS economists find Europe's car sector confidence has been hit by potential car

tariffs, especially in autos hub Germany, though they say the link to potential tariffs is so

far "tentative".

"European Commission business confidence data shows that export expectations for motor

vehicles and basic metals are among the three sectors that have seen the steepest declines since

end-2017," they note.

The data also shows the sharpest decline in production expectations for motor vehicles

products.

Germany's Ifo survey showed autos sector export expectations declined the most across all

manufacturing sectors since end-2017, while the ZEW survey also showed a big decline in the

autos sector.

UBS (LSE: 0QNR.L - news) ' baseline scenario sees a 10-30 percent decline in investment and 30-50 percent less car

exports to the U.S., causing a 0.2 percentage point hit to growth.

Here are their scenarios for the potential impact of car tariffs on the Euro zone's economic

growth:

(Helen Reid)

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RELIEF FOR SEMICONDUCTORS (1118 GMT)

Tech weighs little on the European market but today it's providing the biggest boost to the

STOXX and most of that is due to semiconductor bellwether ASML's strong results.

But what does the update tell us about the broader semiconductor industry, recently hit by

worries over trade wars and earlier this year by concerns about peaking demand?

We asked Neil Campling, co-head Global Thematic Group at Mirabaud Securities.

"The wider context is one of relief because the trade wars were seen as potentially

disrupting the semiconductor chain and ASML is seen as the gold standard in the industry. Their

equipment is such a high expense that you may have had some expect to see more order pushouts

because of the uncertainty. So they delivered well in this uncertain macro environment and that

is leading to relief for the broader semi tape," he says.

There is, however, something to be somewhat cautious about.

"What's less clear is how tariffs may impact some end demand verticals in the second half of

the year or if the rising interest environment may crimp demand. This is why the inventory

trends and lead times will be closely watched when guidance is given by companies over the next

few weeks," he adds.

To conclude, Campling says a short term cyclical peak seems likely but the focus now is how

shallow the dip will be.

(Danilo Masoni)

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MINERS SET FOR A RESULTS-DRIVEN REVIVAL? (1010 GMT)

One of the best-performing sectors in Europe for most of the first half, miners have

suffered recently from a cocktail of trade tensions, weaker China data, a stronger dollar and

concerns around emerging markets.

But Goldman analysts remain positive on mining, expecting balance sheets to show net cash

positions by the end of 2018 / first-half 2019.

They see trade tensions as mainly a sentiment impact, reiterating the impact on growth

should be "negligible".

So, what to watch in upcoming results?

"We believe that consensus is underestimating the potential scale of returns the miners

could make, the more so as their balance sheets are now robust and free cash flows strong, with

no significant growth capex scheduled," write GS analysts.

They expect the biggest dividend upside from Glencore (Frankfurt: 8GC.F - news) , Anglo American (LSE: AAL.L - news) and

BHP Billiton (NYSE: BBL - news) .

GS' top picks globally are Glencore, First Quantum, Lundin Mining, and

Nyrstar (Berlin: 32660160.BE - news) - all exposed to metals which they're positive on (copper, zinc, thermal coal).

On free cash flow they like Glencore and Anglo American.

They also highlight valuation as a key metric, pointing out that Aurubis (IOB: 0K7F.IL - news) and Kumba

- which they rate as "sell" - trade at premiums.

Below you can see earnings revisions for Europe's mining sector have been trending higher

into the results season:

(Helen Reid)

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OPENING SNAPSHOT: EUROPE UP AS EARNINGS DOMINATE (0714 GMT)

It really is all about earnings this morning as European shares open higher, led by a strong

bounce across tech stocks as updates from Ericsson and ASML get a warm reception.

Banks are on the backfoot though as Danske Bank (LSE: 0NVC.L - news) shares take a tumble after the lender's Q2

pretax profit fell short of expectations.

Here's your opening snapshot:

(Kit Rees)

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WHAT YOU NEED TO KNOW BEFORE THE OPEN (0643 GMT)

European shares are set to open higher today, helped by currency weakness as Brexit

challenges further depress the pound and the euro surrenders to a bounce in the dollar following

the Federal Reserve Chairman's upbeat assessment of the U.S. economy.

Futures on main country benchmarks were up 0.4 percent, indicating that the pan-European

STOXX 600 index could climb back to the three-week peak hit earlier this month.

A string of good-looking earnings updates could also provide support while trade worries

ease, partly helped by yesterday's wide ranging trade deal between the EU and Japan which Credit

Suisse WM said offered some relief to markets. Among the European companies that could benefit

from the deal are exporters such as Pernod Ricard (TLO: RI-U.TI - news) , LVMH, Danone (LSE: 0KFX.L - news) and Nestle (Swiss: NESN.VX - news) .

Back to earnings, shares in ASML, Ericsson, Novartis (IOB: 0QLR.IL - news) , easyJet, Electrolux and BHP are all

seen higher following their updates, while Akzo Nobel (Amsterdam: AKZA.AS - news) is seen falling after its results fell

short of expectations.

(Danilo Masoni)

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EARLY MORNING HEADLINE ROUNDUP: EARNING UPDATES LOOKING GOOD (0553 GMT)

Today's headlines are all about earnings updates and they're looking good.

Novartis says on track for 2018 growth despite Sandoz weakness

Ericsson posts surprise profit in Q2

ASML Q2 sales ahead of estimates, sees stronger H2

Software AG Q2 sales in line, slight beat on profit

Akzo Nobel misses Q2 core earnings, sales forecasts

Swedbank Q2 net profit beats forecast

Handelsbanken profit narrowly beats forecast, to guide on savings in Q3

Swatch Group expects further growth in H2 after H1 net jumps 67 pct

BHP posts record annual iron ore output, beats Q4 f'csts

Ryanair cancels 1 pct of flights on Friday as strike crisis deepens

Iraqi police disperse protesters outside Zubair oilfield as unrest grows

(Danilo Masoni)

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MORNING CALL: EUROPEAN SHARES GAINING FURTHER ON UPBEAT FED (0530 GMT)

European shares are set to open higher, building on gains scored in afternoon trading

yesterday after the U.S. Federal Reserve Chairman's upbeat assessment of the economy

lifted the dollar, boosting sentiment. Jerome Powell will continue his testimony

today.

"Another bullish update with Powell once again talking up the strength of the US economy

could see the dollar extend its gains from Tuesday's session," said Jasper Lawler at London

Capital Group.

Financial spreadbetters expect London's FTSE to open 35-40 points higher, while Frankfurt's

DAX is set to open 52-54 points higher and Paris' CAC 14-16 points higher.

Over in Asia, shares followed Wall Street higher as the bullish outlook from the head of

the U.S. central bank buoyed the dollar, lifted Tokyo shares to a one-month top and sent gold to

a one-year trough.

(Danilo Masoni)

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