LIVE MARKETS-Small-caps: Look closely and you can find value

* European shares reverse course

* Autos, construction stocks drag

* Wirecard (IOB: 0O8X.IL - news) tops DAX after 2025 strategy update

Oct (Shenzhen: 000069.SZ - news) 9 (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

SMALL-CAPS: LOOK CLOSELY AND YOU CAN FIND VALUE (1202 GMT)

European small-caps have been laggards this year but they're still outperforming large-caps

and there's value to be found in some areas of the market, Credit Suisse (IOB: 0QP5.IL - news) analysts say.

Small-caps' performance relative to large-caps, as you can see below, is closely correlated

with PMIs which have been weak, implying slower earnings momentum.

Because leading indicators in Europe are not expected to improve in the short term, one

could draw the conclusion to stay away from small caps for now.

But looking closer, there seems to be hope in the fact that EPS estimates have increased

recently in a few countries such as Switzerland Italy, Norway and Ireland (Other OTC: IRLD - news) .

CS advises investors venturing into Italian small-caps focus on the exporters, though, given

political uncertainty there.

CS' key small and mid-cap ideas include ADO Properties (LSE: 138195.L - news) , Bodycote (LSE: BOY.L - news) , Cassiopea (Other OTC: CPPSF - news) , Gerresheimer (IOB: 0NTI.IL - news) ,

Inmarsat (Other OTC: IMASF - news) , Sophos, Ultra Electronics (Frankfurt: 909716 - news) , and William Hill (Frankfurt: 633847 - news) .

(Helen Reid)

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CARMIGNAC SOLD ITS AMAZON STAKE, HERE'S WHY (1140 GMT)

Carmignac earlier announced it sold its stake in Amazon in a bid to untangle its investments

from the business cycle.

"We have continued to take profits on tech stocks, for example selling our holding in Amazon

after it gained 70% since the beginning of the year," Didier Saint-Georges, managing director at

the French asset manager, writes in his monthly note, adding Carmignac reinforced its stake in

French pharmaceutical group Sanofi (LSE: 0O59.L - news) .

"We have likewise shied away from sectors and companies that are vulnerable to interest-rate

hikes," Saint-Georges writes, explaining that "offloading stocks and taking profits over the

past few months has enabled us to increase our cash holdings" on the lookout for new

opportunities.

"Our only exposure to cyclical stocks is in the oil industry, where the supply–demand

equation is still highly favourable to oil prices," he adds.

Here's Amazon's ride since the beginning of the year with a return of about 75 percent for

any investor who managed to sell at the top:

(Julien Ponthus)

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EURO ZONE CORPORATES PLAN CAPEX SPLURGE DESPITE POLITICAL RISKS (1016 GMT)

Despite multiple risks on the horizon, euro zone companies are ramping up plans to invest

capital for growth, UBS (LSE: 0QNR.L - news) finds in a survey of 600 firms conducted from Aug 1 to Sep (Shanghai: 600021.SS - news) 17.

Some 49 percent of companies said they planned to increase investment versus 14 percent

planning cuts - a net positive balance of +36 percent, up from +26 percent in Q2 and an all-time

high since the survey began.

The very strong results they find for corporate investment are "very surprising in light of

political and trade policy risks and the mixed message of other sentiment indicators", UBS

notes. Technology shifts and domestic demand are the two most powerful factors driving capex.

UBS analysts have increased their estimates for 2019 capex growth on the back of the strong

response from companies - they see capex growing in 2018 for the first time in five years, and

up their 2019 forecast to 6.0 percent from 2.8 percent in June.

As you can see below, companies across the euro zone are increasingly expecting to increase

capex.

Want exposure to this theme? Sectors correlated to German capital goods orders are your best

bet, UBS says. These include capital goods, diversified financials, banks, transport, and

semiconductors.

(Helen Reid)

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OPENING SNAPSHOT: EUROPEAN SHARES ATTEMPT RECOVERY, RPC AND WIRECARD SHINE (0717 GMT)

European indices are rising this morning with Italy leading the way, up 0.5 percent after a

sharp fall yesterday. Nothing to write home about though with the STOXX 600 and the DAX barely

managing to stay positive - so this attempted recovery may yet fail.

Basic resources (Frankfurt: W8Z.F - news) and oil stocks are the top gainers, while autos are bringing up the rear.

In top movers, RPC (NYSE: RES - news) is top of the STOXX after the packaging company extended the deadline for

Apollo and Bain to make bids for it. RPC had fallen as much as 8 percent yesterday on concerns

ahead of the deadline.

Wirecard is also rising robustly, up 3.5 percent after it said it sees core profits growing

sixfold by 2025.

Sage Group (LSE: SGE.L - news) shares are down 6.8 percent, bottom of the STOXX and the FTSE after Barclays (LSE: BARC.L - news) cut

the stock to underweight.

(Helen Reid)

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WHAT WE'RE WATCHING BEFORE THE OPEN (0650 GMT)

The bounce in Chinese stocks after a heavy sell-off on slowdown worries may help European

shares recover from the six-month lows hit yesterday, with stock index futures trading up

0.1-0.2 percent as the focus slowly moves to the reporting season.

Earnings updates from German fintech company Wirecard and Swiss fragrance maker Givaudan

could provide support. Wirecard shares are up 4.9 percent in pre-market trade after the firm

said core profits would grow sixfold by the middle of the next decade, while Givaudan (LSE: 0QPS.L - news) is up more

than 1 percent as Q3 sales rose 9.8 percent, slightly beating analyst forecasts.

Ceconomy however is seen taking a bit hit after Europe's biggest consumer electronics

retailer said 2017-18 operating profit came in below its targets.

Earnings in Europe are expected to show double-digit growth in the third quarter but remain

below the stellar rate seen for Wall Street. According to Refinitiv IBES data, earnings growth

for euro zone companies on the STOXX 600 is seen at 11.8 percent, nearly half the 21.5 percent

expected for the S&P 500.

Dealmaking could also animate the session with plastic packaging maker RPC Group (LSE: RPC.L - news) giving two

competing private equity suitors more time to make bids, while sources said Volkswagen (IOB: 0P6N.IL - news) may soon

hire four banks to advise on a listing of its truck unit.

(Danilo Masoni)

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HEADLINES ROUNDUP: EYES ON WIRECARD, GIVAUDAN UPDATES (0558 GMT)

Earning updates from German fintech company Wirecard (Swiss: WDI.SW - news) (up 3.1 percent in premarket)

and fragrance and flavour maker Givaudan are in focus this morning, while some minor

dealmaking news such as Volkswagen being set to hire banks for its truck unit IPO

could also animate a session. Here are the headlines that have caught our attention so far:

Wirecard sees core profits growing sixfold by 2025

Givaudan reports 8.4 percent sales increase in first nine months

Electronics retailer Ceconomy says FY earnings below targets

Former Tesco executives encouraged profit overstatement, misled stock market, court told

Volkswagen set to hire four banks for truck unit IPO-sources

Britain's RPC gives rival suitors Apollo and Bain more time to bid

EU antitrust regulators scrap probe into Swedish mobile operators

NH Hotels Board Expresses Unfavorable Opinion Over Minor's Offer

Knorr-Bremse accelerates IPO as other listings

Airbus picks planes boss Faury as next CEO to end uncertainty

Citigroup (NYSE: C - news) , Deutsche Bank (IOB: 0H7D.IL - news) face Australian court in landmark cartel case

Swiss bank UBS on trial in France over alleged tax fraud

Banco BPM thinking of hiring adviser for consumer credit business - source

Norsk Hydro (LSE: NHY.L - news) to resume Brazil's Alunorte output at half capacity

WPP (Frankfurt: A1J2BZ - news) loses role as Ford's lead creative agency

Germany's Trimet expects strong 2019 aluminium demand

Amundi (Berlin: 350155.BE - news) aims to have all its funds rated ESG by 2021

Santander UK (LSE: 44RS.L - news) says Susan Allen to head retail and business banking ops

Volkswagen furloughs workers in Brazil as demand from depressed Argentina weakens

BHP Billiton (NYSE: BBL - news) evacuates two U.S. Gulf of Mexico platforms ahead of Hurricane Michael

Equinor evacuates its Titan oil platform in U.S. Gulf of Mexico ahead of storm

British Airways loses New York crown to low-cost rival Norwegian

(Danilo Masoni)

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MORNING CALL: EUROPE SET TO BOUNCE SLIGHTLY (0515 GMT)

European shares are expected to bounce back at the open today after hitting six-month lows

yesterday on concern over an economic slowdown in China and Italy's budget plans.

Financial spreadbetters expect London's FTSE to open 15 points higher at 7,249, Frankfurt's

DAX to open 34 points higher at 11,981 and Paris' CAC to open 19 points higher at 5,320.

In Asia, shares hit fresh 17-month lows before edging up again as China allowed its currency

to slip past a psychological bulwark amid sharp losses in domestic share markets.

(Danilo Masoni)

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