LIVE MARKETS-The resurgence of UK value

* European shares rise, Italy up 1.8 pct

* Results lift Meggitt (Other OTC: MEGGF - news) , hurt Merlin

* Kion jumps on UBS (LSE: 0QNR.L - news) upgrade

* Wall Street rebounds as strong bank results help

Oct (Shenzhen: 000069.SZ - news) 16 (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

THE RESURGENCE OF UK VALUE (1437 GMT)

Despite their sensitivity to sterling and Brexit news, UK stocks are also reflecting trends

in the broader market, Berenberg analysts say, noting mid-cap growth stocks did worse in last

week's selloff while those considered "value" plays did well.

There's been a big reversal in some of the UK's best-performing growth stocks, with

"multi-year winners" such as Learning Technologies (LSE: LTG.L - news) , Keywords Studios (LSE: KWS.L - news) , RWS, Fevertree and Burford

down by an average of 21 percent, they find.

Growth stocks across the UK and European markets are beginning to lose their shine after

years of outperformance.

Meanwhile a (somewhat unlikely) combination of bakery company Greggs (Stuttgart: 41G1.SG - news) , Telecom Plus (LSE: TEP.L - news) , The AA,

pub operator Greene King (Frankfurt: A0F66P - news) , pet store Pets at Home (Frankfurt: A1XFE7 - news) , and Renewi would have returned 3 percent since

the start of this month, despite them being on average down 33 percent year-to-date. These

stocks have been out of favour with very low valuations, which may now lure investors in.

As you can see below, overall analysts have been downgrading their estimates for FTSE 250

earnings in recent weeks:

(Helen Reid)

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EUROPEAN INVESTORS GET OILY (1316 GMT)

Oil & gas stocks are the only sector in the red today on the back of a drop in crude prices,

but BAML's European fund manager survey today finds the percentage of European fund managers

overweight Energy is its highest in 6 years - with a net 34 percent overweight, a 21 percent

increase from last month.

This level of allocation to energy stocks triggers BAML's contrarian sell signal, they say,

although the level is far from the highs it reached in 2008 before the oil price shock (62

percent overweight in June 2008).

Autos and Travel stocks, on the other hand, saw net 25 percent drops in positioning.

Investors are the most bearish on Construction and Utilities stocks, while they're increasingly

overweight Healthcare (Shanghai: 603313.SS - news) , and Banks have seen a remarkable reversal from last month's survey, as

you can see below.

Another interesting observation from the survey is that "not a single sector that is

perceived to be overvalued by respondents is overweighted, suggesting momentum may shift in the

coming months into defensive value".

Overall, global investors are the most downbeat on the global economy they've been since Nov

2008, and have switched the U.S. for Japan as their most favoured equity region:

(Helen Reid)

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MIDDAY SNAPSHOT: DIP BUYERS' MOOD IMPROVING (1219 GMT)

Mood has clearly improved throughout the session and euro zone equities are now up

on a high, up 1 percent while U.S. futures are firmly in positive territory.

Seems like Goldman Sachs (NYSE: GS-PB - news) and Morgan Stanley (Xetra: 885836 - news) 's strong performance in equity trading has

something to do with higher spirits. See

Quite a shift from this morning's cautious mood.

"It doesn't look like investors are rushing in just yet," noted IG (Frankfurt: A0EARV - news) 's Chris Beauchamp a few

hours ago, cautioning that "a fresh selloff remains likely".

"An ‘After you, Claude’ approach seems to apply," he wrote using the catchphrase of RAF

pilots about to begin an attack.

Another colourful expression was Nicolas Cheron, from Binck.fr who told his clients "it was

urgent to wait".

Time (Frankfurt: A11312 - news) to jump back in?

(Julien Ponthus)

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OPENING SNAPSHOT: EUROPEAN SHARES BUILD ON RECOVERY (0751 GMT)

In early deals, European shares are climbing 0.4 percent with defensive sectors utilities,

telecoms and real estate, as well as autos, leading the way.

Merlin meanwhile is down 7.7 percent, set for its worst day in a year after warning about

rising costs from labour and regulation.

British American Tobacco (Kuala Lumpur: 4162.KL - news) shares are down just 1.2 percent but the heavyweight is weighing on

the FTSE, after it cut its forecast for revenues from non-cigarette products.

Broker notes are also moving some stocks.

Kion shares are up 10.2 percent, top of the STOXX after UBS upgraded it to "buy", saying a

recent pullback has taken the shares down too far. "While we were previously concerned that the

market could overrate the structural growth in warehouse automation and underrate the cyclical

challenges in trucks, we think it is now likely the opposite on both counts," they write.

Ocado is also up 4.5 percent with traders citing a double upgrade to "buy" from BAML.

Italy's FTSE MIB is up 1.4 percent, outperforming the rest as Italian bond yields fall on

encouraging comments from Tria.

(Helen Reid)

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ON OUR RADAR: UPDATES FROM BAT, MEGGITT, TOMTOM (Swiss: TMO.SW - news) (0651 GMT)

European shares are set to stabilise above 22-month lows hit in the previous session as the

focus turns from the upset caused by a steep surge in U.S. yields to the start of the reporting

season which is expected to deliver double-digit earnings growth for the third quarter.

Futures on main euro zone benchmarks were trading up 0.1 percent, while FTSE futures were

lagging a tad behind amid uncertainty surrounding Brexit talks.

In earning updates, British American Tobacco cut its full-year revenue target for

next-generation products, citing a flat market in Japan and a product recall in the United (Shenzhen: 000925.SZ - news)

States. On a more positive note, engineer Meggitt raised its estimate for 2018 organic revenue

growth thanks to higher demand for its wheels, brakes, fuel tanks and other aeroplane parts,

while TomTom (LSE: 0MKS.L - news) posted a stronger-than-expected rise in third-quarter core earnings.

About 6 percent of STOXX 600 companies are due to report this week. Overall, third quarter

earnings for the index are expected to have risen 14 percent on revenues up 7.4 percent,

according to Refinitiv I/B/E/S data, while euro zone earnings are seen up 12 percent. That

compares to the 21.6 percent growth seen for US companies.

Other stock movers: Profit up 14 pct at housebuilder Bellway (Frankfurt: 869646 - news) on higher prices, sales; Merlin

Entertainments to meet 2018 forecasts; Volvo warns some truck engines could be exceeding

emission limits; Ambea to buy Aleris' Nordic care business in SEK 3 bln deal; Drax to pay 702

million pounds for Scottish Power generation facilities

For more headlines, check out our previous post.

(Danilo Masoni)

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HEADLINES ROUNDUP: EARNINGS START TO FLOW IN (0559 GMT)

It looks there is no big corporate news that could shake markets this morning, although the

European earnings season is starting to see the first releases with results coming in from

TomTom and Talanx (IOB: 0QA8.IL - news) .

About 6 percent of STOXX 600 companies are due to report this week. Overall, third quarter

earnings are expected to have risen 14 percent on revenues up 7.4 percent, according to

Refinitiv I/B/E/S data.

Telecoms could also continue to draw attention after Deutsche Telekom (IOB: 0MPH.IL - news) said it was confident

it will secure EU antitrust approval to buy Tele2 (LSE: 0QE6.L - news) 's Dutch business.

Here is out early morning headline roundup.

TomTom reports better-than-expected Q3 core earnings

Sanofi (LSE: 0O59.L - news) , Regeneron say late-stage Dupixent trials show positive results

Total CEO sees lower demand, higher supply of crude in 2019

Talanx Q3 profit hit by industrial property insurance losses

Deutsche Telekom CEO optimistic about EU okay for Tele2 Dutch deal

Linde (IOB: 0H3X.IL - news) says FTC's Commissioners looking into merger

Swisscom (IOB: 0QKI.IL - news) evaluating tie-up for Italian unit Fastweb - Bloomberg

Dassault Aviation (LSE: 0IAX.L - news) will raise production rates on certain models -CEO

BHP doubles stake in promising Ecuador copper project

Rio Tinto Q3 iron ore production falls on planned maintenance and safety pauses

Anglo Asian's Azerbaijan gold output rises 47 pct in Q3

BP and Eni (LSE: 0N9S.L - news) to start drilling in Libya within months- The Telegraph

Burberry joins luxury sector's race to refresh products monthly

France's Safran (LSE: 0IU8.L - news) redesigned part of Silvercrest engine -executive

Italy's Piovan revises IPO range to low end, books to close early

Cepsa float fail could jeopardise other energy listings

Advent starts preparations for IPO, sale of Addiko bank -sources

Sweden's Fagerhult to buy Italian lighting group iGuzzini

Offshore drillers eye recovery by 2020

(Danilo Masoni)

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MORNING CALL: EUROPE SET TO STABILISE ABOVE 22-MONTH LOWS (0512 GMT)

European shares are expected to rise slightly at the open today, further stabilising

following a turbulent week that pushed them to 22-month lows, as investors reacted to a steep

rise in U.S. Treasury yields and fresh political worries.

Financial spreadbetters expect London's FTSE to open 1 point higher at 7,031, Frankfurt's

DAX to open 30 points higher at 11,644 and Paris' CAC to open 8 points higher at 5,103.

In Asia, stocks rose modestly, gaining a firmer footing after a week of heavy losses,

although increasing tensions between Saudi Arabia and the West fanned geopolitical concerns and

capped gains.

(Danilo Masoni)

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