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LIVE MARKETS-Rudolph's nose isn't the only thing flashing red

Dec (Shanghai: 600875.SS - news) 28 - Welcome to the home for real-time coverage of European equity markets brought to

you by Reuters stocks reporters and anchored today by Helen Reid. Reach her on Messenger to

share your thoughts on market moves: helen.reid.thomsonreuters.com@reuters.net

RUDOLPH'S NOSE ISN'T THE ONLY THING FLASHING RED (1508 GMT)

This may have been quite a pleasant festive season for gold brokers.

BullionVault released data showing Christmas 2018 has been a great vintage indeed: the best,

in fact, since 2012, with a sharp rise in both new gold investors and the total quantity of gold

bought.

The driver, not surprisingly, is a "worsening slump in global stock markets," they argue.

Key takeway?

"If gold acts as a barometer of financial fears then it's flashing red for 2019", wrote

Adrian Ash, director of research at BullionVault, pointing to fears about the Chinese economy

slowing down or Britain's decision to exit the European Union on March 29 2019.

Looking back at the last three months, gold has been indeed been a popular commodity.

(Julien Ponthus)

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EUROPEAN BOUNCE GATHERS PACE AS TECH, BANKS, AND OIL CLIMB (1117 GMT)

A relief rally across markets is gathering steam in Europe with the STOXX up 1.8 percent,

set for its strongest day since April.

Tech stocks including AMS (IOB: 0QWC.IL - news) , Infineon (Xetra: 623100 - news) , Wirecard (IOB: 0O8X.IL - news) , and Logitech are leading the charge. The

sector index is up 2.3 percent, along with oil & gas up 2.17 percent.

Oil stocks are up as crude prices are rebounding, clawing back some of the ground lost this

week, but remain close to their lowest levels in more than a year.

As investors start looking towards 2019 and what themes and surprises may come out of the

rubble of this year, one analyst points out a very interesting metric: current estimates for

2019 earnings growth for the STOXX 600 are 8.4 percent, which is actually more than the expected

2019 earnings growth for the S&P 500 (7.6 percent).

"My feeling is corporate earnings in Europe will surprise a few people in 2019," says Chris

Bailey, strategist at Raymond James. "Once people get their heads around the fact the U.S. is

not going to have yet another double-digit return year in 2019, you can look elsewhere."

Nine of the past ten years, earnings growth estimates have been more credible for the U.S.

than for Europe, Bailey emphasises, but this year that could change, marking a potential regime

shift which could lure investment flows back into this region.

(Helen Reid)

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WHAT'S ON THE RADAR: AN ATTEMPTED BOUNCE (0736 GMT)

European stocks are set for a strong open on Friday after a recovery bounce in the U.S. and

Asia, though whether the region will be able to hold on to early gains remains an open question

as a turbulent and holiday-shortened week draws to a close.

Futures opened up 0.7 percent to 1 percent, indicating a substantial bounce from levels on

Thursday when the STOXX 600 hit its lowest level since Nov 9 2016 – the day Donald Trump’s

election as U.S. President triggered a broad rally as investors piled into a “Trumpflation”

trade across markets.

Threats still lurk, however, with the U.S. government shutdown ongoing after a brief meeting

of Congress Thursday afternoon took no steps to end it.

Further signs of a souring in U.S.-China relations over technology could also keep a lid on

any optimism: sources told Reuters Trump is considering an executive order in the new year to

declare a national emergency that would bar U.S. companies from using telecoms equipment made by

China’s Huawei and ZTE (Xetra: A0M4ZP - news) .

(Helen Reid)

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EUROPEAN FUTURES RISE AFTER U.S., ASIA RELIEF RALLY (0717 GMT)

Futures for European benchmarks opened up strongly, between 0.7 and 1 percent, though

they've already lost some steam with DAX futures now up 0.5 percent.

On the companies front, a profit warning from British inkjet technology maker Xaar (LSE: XAR.L - news) will

likely drive the shares down sharply, while M&A activity continues after yesterday's big news of

Vinci (LSE: 0NQM.L - news) 's $3.7 billion swoop on Gatwick Airport.

The founding family of Italian jewellery group Casa Damiani said it would launch a takeover

to buy it and delist it from the Milan bourse.

Here's a sweep of the biggest corporate news today:

Carige's top investor meets ECB after blocked cash call - sources

Founding family launches takeover to delist Casa Damiani jewellery group

Rio Tinto (Hanover: CRA1.HA - news) says no job cuts in 2019 due to driverless train project

Xaar Says Now Expects H2 Rev To Be Only Slightly Better Than H1

Renault (LSE: 0NQF.L - news) union calls for more transparency over Dutch holding

(Helen Reid)

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U.S. BOUNCEBACK TO LIFT EUROPEAN STOCKS (0652 GMT)

A strong rally in U.S. stocks is likely to drive Europe up this morning after a terrible

trading week shortened by Christmas holidays.

The STOXX hit its lowest level since Nov 9 2016 yesterday and lost 1.7 percent, but the S&P

and Dow's gains of more than 1 percent should help lift sentiment - though concerns around the

ongoing U.S. government shutdown and U.S. plans to ban Huawei and ZTE purchases will keep a lid

on optimism.

Asia stocks advanced after Wall Street ended volatile trade in positive territory, adding to

the previous session's big gains, although lingering investor jitters helped support safe-haven

currencies such as the yen.

Volatility in euro zone stocks rose to a high of 26.88 yesterday, the volatility

gauge's highest level since Feb 13 when the market was recovering from a sudden spike in the

VIX.

(Helen Reid)

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(Reporting by Helen Reid, Danilo Masoni, Julien Ponthus)