LIVE MARKETS-Shooting for the moon

* European shares open sharply higher

* China March factory activity unexpectedly grows

* UK parliament votes on Brexit options at 1900 GMT

* EasyJet launches Brexit warning, DSV to buy Panalpina

April 1 - 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

SHOOTING FOR THE MOON (1100 GMT)

A new space race is heating up following U.S. vice president Mike Pence's call to NASA last

week to put astronauts on the moon again within five years.

That's some four years earlier than NASA's own target.

The move was partly inspired by China's robotic lunar landing mission earlier this year

while Israeli nonprofit SpaceIL also has its sights set on a robotic landing in April.

Whoever ends up ahead, the modern-day space race is a big opportunity for investors with a

2024 timeline for a manned lunar mission requiring significant government spending.

Not surprisingly, the bank says it prefers aerospace, satellite and communications segments,

while new space startups may offer investment opportunities in private markets.

(In November, NASA named nine U.S. companies, including Lockheed Martin Corp, that

would compete for funding under the space agency's renewed private-public partnership for

developing technology to explore the lunar surface.)

But it's the value the bank puts on the space economy that's eye-catching.

UBS reckons it could grow to almost $1 trillion in the next couple of decades from $340

billion currently.

To put that into context, that's the same as the GDP of the Netherlands or Turkey.

In a previous note on the potential economy of space travel and tourism, UBS estimated that

by 2029 space tourism could be a market worth $3 billion per year and growing at double digits.

Below is their timeline on how this could pan out:

(Josephine Mason)

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WANNA PLAY NEGATIVE BOND YIELDS? OPT FOR HIGH-DIV (0947 GMT)

With 10-year Bund yields back in the red following the recent policy shifts by central

banks, quality and high-div stocks are back on the radar screens with investors pondering which

one is better placed to benefit from the latest shift in market conditions.

Morgan Stanley would put their money on high-div.

"We prefer to play low bond yields through High Dividend Yield stocks rather than Quality as

valuations are much less demanding," analysts at the US bank say in a note.

"Quality has been the biggest beneficiary of low bond yields in this cycle but going forward

we prefer the risk-reward of High Dividend Yield stocks," they add.

They also highlight that buying high dividend stocks is not necessarily a defensive, low

beta trade.

"Buying dividend stocks isn't an entirely defensive strategy as sectors that currently have

the highest dividend yield in the market are a mix of traditional defensive (Utilities,

Telecoms) and high beta/cyclical sectors (Banks, Energy, Autos)," they note.

That being said, they update their high & secure dividend yields basked.

Within this basket of 41 stocks, 18 are rated overweight: DNB, KBC, Lloyds

, Siemens, Rexel, BAE Systems, Saint-Gobain,

Volkerwessels, Greene King, BP, Total, AXA, Direct

Line, Covestro, Merlin Properties, Evry, Orange

and Iberdrola.

To conclude here's an MS chart showing that the UK and Europe offer the highest 12-month

forward dividend yield in the DM world after Australia.

(Danilo Masoni)

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CHINA DATA POWERS UP EUROPE (0801 GMT)

Data showing that factory activity in China unexpectedly grew for the first time in four

months in March has ignited a rally in European shares at the open, lifting the STOXX 600 up 0.9

percent in a broad-based bounce led by cyclical stocks.

"Some thankfully better than forecast data from China set the European markets up for a

decent open as April got underway," says Connor Campbell, analyst at Spreadex.com.

The export-oriented auto sector is up an outstanding 2.9 percent, with activity

peppered up by ongoing talk about possible deal-making in the industry, while among other

cyclicals, basic resources stocks are up 2.4 percent and banks up 1.1 percent.

Defensive sectors are underperforming but only utilities are trading in the red,

down 0.1 percent, while a 7 percent fall in easyJet (after the airline warned that

demand and pricing were suffering from Brexit jitters) kept its sectoral index around

parity.

All country indices are trading in positive territory in early deals.

(Danilo Masoni)

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WHAT'S ON OUR RADAR BEFORE THE OPEN (0652 GMT)

European shares are set to rise sharply on the first trading day of the second quarter with

stock index futures rising 0.8 percent following unexpected growth in Chinese factory activity

in March. FTSE futures are up 0.2 percent ahead today's parliament votes on different Brexit

options.

On the corporate front, Panalpina is expected to rise as much as 15 percent at the open

after Denmark's DSV agreed to buy the Swiss freight forwarder in a share swap valued at 4.6

billion Swiss francs.

Still in dealmaking, Fiat Chrysler could rise further (up 1-2 percent premarket) after

Bloomberg reported that PSA Group and the Italian American carmaker are exploring a partnership

to share investments to build cars in Europe, while oil services firm Saipem could also get a

lift from media speculation it could exit its drilling business.

In earnings, traders said a better-than-expected update from Apple supplier Foxconn could

help lift shares of European suppliers of the U.S. tech giant, such as AMS and Dialog Semi or

STMicro, while Easyjet could fall 3-5 percent at the open after giving a cautious outlook for

the second half of the year. A sequential rise in Macau gambling revenue could

support shares in Asia-exposed luxury stocks.

Here are some UK headlines (check out the previous post for other headlines):

EasyJet warns of Brexit hit to European demand

Network International announces pricing for up to $3bln listing

Cabot Energy sees higher FY revenue

Joules Group ceo will retire before end of FY 2020

Britain's Serco extends contract with Dubai Metro for up to $185 mln

Thames Water Submits Revised Business Plan For 2020-2025

Astrazeneca: Selumetinib gets breakthrough therapy designation

Ferrexpo Updates On Review Of Charity Donations, Delays Results Again

-MJ Gleeson Says Appointed Lazard To Explore Options For Strategic Land Business

Failed LK Bennett chain circled by Ashley, Dune and Feng https://on.ft.com/2HTgx7k

Novartis pays $310 mln upfront for inflammation specialist IFM

(Danilo Masoni)

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FUTURES RALLY, EYES ON PANALPINA-DSV (0614 GMT)

European stock futures have opened sharply, up 0.4-0.9 percent, confirming earlier

indications from spreadbetters for a strong start of the second quarter following an unexpected

growth in Chinese factory activity in March.

On the corporate front, Panalpina is on the watchlist after Denmark's DSV

agreed to buy the Swiss freight forwarder in a share swap valued at 4.6 billion Swiss francs.

Meanwile talk about a possible dealmaking in the auto sector contines with Bloomberg

reporting at the weekend that PSA Group and Fiat Chrysler are exploring a

partnership to share investments to build cars in Europe.

Here's your early morning headlines roundup:

Denmark's DSV to buy logistics company Panalpina in $4.6 billion deal

PSA Group and Fiat Chrysler explore European venture - Bloomberg

Rio Tinto cuts 2019 iron ore shipment outlook after cyclone

Wirecard says compliance manager's departure not connected to investigation

ECB extends mandate for Italian bank Carige's administrators to Sept. 30

Daimler asks EU antitrust regulators to probe Nokia patents

(Danilo Masoni)

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EUROPE SEEN STARTING Q2 ON THE UP ON STRONG CHINA DATA (0550 GMT)

European shares are expected to start the first session of the second quarter on the up

after China's official purchasing managers' index released on Sunday showed factory activity

unexpectedly grew for the first time in four months in March.

Financial spreadbetters expect London's FTSE to open 32 points higher at 7,311,

Frankfurt's DAX to open 98 points higher at 11,624 and Paris' CAC to open 42

points lower at 5,393, a trader said.

Over in Asia, stocks rallied as the positive Chinese factory gauges and signs of progress in

Sino-U.S. trade talks boosted sentiment, although another defeat for British Prime Minister

Theresa May's Brexit deal added to sterling's woes.

The British Parliament will vote again on different Brexit options later today and then May

could try one last roll of the dice by bringing her deal back to a vote in parliament as soon as

tomorrow. Parliament is due to vote at around 1900 GMT.

(Danilo Masoni)

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