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LIVE MARKETS-Saying goodbye to rotation into value

* European stocks hit one-month lows as gloom over economy deepens * STOXX 600 down 1.4%, set for worst two-day drop since early August * Trade-sensitive miners fall 2.6%, industrials down 1.7%, cars -1.4% * Flutter rallies on tie-up with Canadian rival * WTO decision on US aircraft subsidy retaliation rights due at 1400 GM Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Josephine Mason. Reach her on Messenger to share your thoughts on market moves: SAYING GOODBYE TO ROTATION INTO VALUE (0956 GMT) The gloom over a global manufacturing slowdown is creating an unpleasant mood as October kicks off with pessimism over the economic outlook and the unpredictable trade talks is leading some to doubt that the rotation into cyclical and value that shaped price action in September has more to go. Among them is Mark Haefele, chief investment officer at UBS Global Wealth Management, who expects stocks to remain range-bound and recommends a modest underweight to equities. "We don't expect the bounce in value relative to growth, and cyclicals relative to defensives, to last," he says. "Since the Global Financial Crisis in 2008–09, global value stocks have underperformed growth by 70%, including dividends. A significant driver of this trend has been the relentless decline in global bond yields... overall in the third quarter bond yields declined significantly, and we don't expect them to move much higher in the foreseeable future," he adds. His base case is that trade tensions will remain high with global growth slowing in 2020 to its slowest pace since the Global Financial Crisis. (Danilo Masoni) ***** OPENING SNAPSHOT: GLOBAL GLOOM KNOCKS EUROPE (0738 GMT) Renewed worries about a global manufacturing slowdown triggered by decade-low factory data from the United States have pushed European stocks to one-week lows in early deals, adding to the market's worst day in nearly two months yesterday. The numbers from the world's No. 1 economy extinguished the last bright spot in global manufacturing outlook so it's not that surprising to see another rout from riskier assets. The weak data and subsequent drop in copper prices are hurting mining companies, which are down 1.6% at their lowest since Sept. 4 and the weakest performing sectoral index. Travel & leisure is the only sector in positive territory, up 0.6%, due to dealmaking in the gambling sector. Paddy Power owner Flutter and Canada's Poker Star have agreed all-share tie-up that will create one of the world's top online betting companies. Flutter shares are up over 12% at their highest since June last year and the top gainer on the pan-European STOXX 600 and lifting European rivals GVC and William Hill with it. (Josephine Mason) ***** ON OUR RADAR: ATLANTIA, CAR SALES AND TESCO (0658 GMT) It's pretty gloomy out there. European stock futures are on the backfoot as the hangover from the dismal factory data and weak U.S. car sales continues to give investors a headache. London futures are lagging other major markets, down 0.5% in a sign that investors are growing nervous about PM Boris Johnson's talks with Brussels as he prepares to unveil his final Brexit offer later in the day. The index's miners may also feel pressure from falling metal prices following the U.S. data. The U.S. car sales data will likely pressure European car makers while the latest estimates for European companies to suffer their worst quarter in three years will also cast a pall over the market, underscoring worries about the health of Europe Inc as the trade war, the global manufacturing slowdown and Brexit bite. In corporate news, Italy's Atlantia is expected to fall 2% after Reuters reported Italian prosecutors have widened an inquiry into suspected safety breaches at subsidiaries the toll road and airport company to include more employees and viaducts than they identified last month. The resignation of Tesco CEO Dave Lewis after six years may offset the supermarket’s better-than-expected H1 results, according to dealers who see the shares down 2-3%, while German leasing company Grenke may get a lift after raising its 2019 forecasts. Credit Suisse could get a boost after saying it expects an estimated $250 million boost to 2020 profit from changes it is making to how it calculates risk-weighted assets and does hedging. Here are your early headlines: Credit Suisse says risk calculation, hedging change to reap $250 mln Italian prosecutors widen probe over safety of Atlantia-operated bridges - sources Tesco CEO Dave Lewis to step down in 2020 Grenke Reports 9M New Leasing Business Of 2.1 Bln Eur Austria's AMS faces wait to learn fate of $4.9 bln Osram bid EDF boss pledges action on nuclear delays and cost overruns IWG's Dixon sees rival WeWork's troubles as an opportunity Italy's Bio-on slashes 2019 sales forecast, blames U.S. hedge fund U.S. CFTC orders six financial institutions to pay fine for reporting failures French spirits maker Pernod Ricard plans to cut around 280 jobs UniCredit to sell 5 bln euros of soured home mortgages next month-sources Norway sovereign wealth fund to divest oil explorers, keep refiners CNH to invest 60 mln euros, cut 330 jobs in Italian plant overhaul BRIEF-Ryanair Sept Traffic Grows 8% To 14.1 Mln Customers BRIEF-Wizz Air Holdings Says Sept Load Factor Up By 0.5Ppts To 94.5% BRIEF-Qinetiq To Acquire Manufacturing Techniques For $105 Mln BRIEF-Inchcape To Sell 3 Retail Sites In Mainland China For 54 Mln Stg BRIEF-Naked Wines Sells Lay & Wheeler Business For 11.3 Mln Stg BRIEF-Hochschild Mining Acquires Rare Earth Deposit In Chile BRIEF-National Grid Confirms Massachusetts DPU Issued Rate Case Order For Massachusetts Electric Business BRIEF-Puretech Health Announces Acquisition Of Minority Interests In Internal Pipeline Platforms (Josephine Mason) ***** THE EXTENDED HANGOVER (0530 GMT) GMT) The decade-low U.S. factory data and weak car sales are expected to drag on European stocks again today, after suffering the worst day in nearly two months yesterday as investors fret about the slowing global economy and shun riskier assets for safe havens. Asian markets have taken their lead from heavy losses on Wall Street overnight. U.S. manufacturing had been the last bright spot in the global economy, but the contraction in the ISM manufacturing reading suggests the trade war is starting to bite in the U.S. industrial heartland, where U.S. President Trump enjoyed huge support in the 2016 election. "It is fair to say that the worldwide manufacturing sector is in trouble. The US-China trade spat is having a knock-on effect around the globe, hence why we saw a sharp move lower in stocks yesterday," says David Madden, market analyst at CMC Markets UK. "Trade talks between the US and China will continue next week, so traders will be paying close attention to any developments. The best dealers can hope for is a de-escalation in trade tensions, but it is obvious that the damage has been done." Adding to the gloomy mood will be data showing a further deterioration in Q3 earnings forecasts for Europe. IG financial spreadbetters expect London's FTSE to open 35 points lower at 7,325, Frankfurt's DAX to open 15 points lower at 12,249, and Paris' CAC to open 3 points lower at 5,594. (Josephine Mason) ***** (Reporting by Danilo Masoni, Joice Alves, Josephine Mason, Julien Ponthus and Thyagaraju Adinarayan)