LIVE MARKETS-STOXX up, Bayer rallies, earnings in focus

* European shares open higher, up 0.2%

* STOXX 600 snaps 4-day losing streak

* Bayer rallies, Elliott welcomes steps to address litigation

* Earnings in focus: H&M, Chr Hansen

* US, China agree tentative trade truce before G20 - SCMP 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

OPENING SNAPSHOT: STOXX EDGES UP, BAYER RALLIES, EARNINGS DRIVE TOP MOVERS (0732 GMT)

European shares are off to a positive start with the STOXX 600 snapping a four-day losing streak following gains in Asia on the back of a report in the South China Morning Post which bolstered hopes of a trade truce between China and the U.S. just before their leaders meet at this weekend's G20. The pan-European benchmark is up 0.2%.

In corporate news Bayer is a big focus after the group hired a lawyer and formed a committee to address glyphosate litigation. Activist shareholder Elliott welcomed its steps to improve supervision of litigation issues and revealed for the first time its holding, saying the company is undervalued. Bayer shares are up more than 6%.

"The... actions of the supervisory board might be an indication for a quicker than expected solution in the glyphosate litigation cases," says Baader Helvea, affirming its bullish view on the stock.

Elsewhere earnings news is driving the biggest movers.

Swedish fashion retailer H&M led the gainers in Europe, up 9.5% after it reported a slight drop in fiscal second-quarter pretax profit but said sales of its summer collections had gotten off to a good start and that it was selling more clothes at full price.

Top faller is Chr Hansen, down 13% after the Danish food ingredients maker reported quarterly profit that fell short of forecasts and cut its revenue outlook for the year, hurt by a disappointing performance at its food colouring and animal health businesses.

In sectors, financials are providing the biggest uplift, helped by a rebound in government bond yields after comments from Federal Reserve officials cooled expectations over aggressive rate cuts in the U.S.

(Danilo Masoni)

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WHAT WE'RE WATCHING AT THE OPEN (0700 GMT)

European shares are set to open higher following gains in Asia on a report in the South China Morning Post that the US and China have tentatively agreed to a truce in their trade war before their leaders meet tomorrow at the G20.

Futures on main country benchmarks are up 0.2-0.5% following four straight sessions of losses on cooling expectations of aggressive rate cuts by the Federal Reserve and caution before the G20. The STOXX 600 however has recovered from the May sell-off and is set to close June up more than 3 percent and not much far away from the nine-month high hit in April.

On the corporate front, it seems dealmaking, stakebuilding and IPOs are dominating headlines, while earnings also start to trickle in.

Elliot has revealed for the first time it has taken a 1.1 billion euros ($1.25 billion) stake in Bayer, saying the company is undervalued and shares are up as much as 4.5% in early Frankfurt trading.

Bayer has also hired an external lawyer to advise its supervisory board and has set up a committee to help resolve a multi-billion dollar glyphosate litigation issue.

Meanwhile, sources from Brussels told Reuters that Vodafone is set to secure EU approval for its $22 billion bid for Liberty Global's cable networks in Europe. Its shares are indicated up 1%.

Still in M&A, Reuters said Generali and rival Grupo Catalana Occidente are vying to take control of Portuguese insurance firm Tranquilidade in a deal worth up to $682 million. French retailer Casino said it plans to restructure its Latin America business, while Italian brake maker Brembo is eyeing an acquisition target of "significant size".

In IPO news, VW unit Traton lowered its price range, Thyssenkrupp stuck to its elevator listing plans, while Swiss Re set the IPO price range for its UK life assurance business.

Among top movers, traders flag Premier Oil, seen up 4-10%, after a big upgrade to production estimates for its Xama field, while a revenue warning Chr Hansen is set to send shares in the Danish bioscience company down 5-8%. Serco is seen rising 3-5% after nudging its full-year revenue target higher.

Elsewhere, the U.S. Federal Aviation Administration has identified a new risk that Boeing must address on its 737 MAX before the grounded jet can return to service. The news is seen lifting shares in European rival Airbus by 1%.

Other stock movers: France's Macron says no need to lower govt's stake in Renault; H&M Q2 profit just lags forecast, summer collections off to strong start; Britain's Kingfisher names Carrefour's Garnier as new CEO; Wet summer hurts Greene King's sales in new financial year

(Danilo Masoni)

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HEADLINES ROUNDUP: DEALMAKING AND IPOS (0554 GMT)

Turning to the corporate front it looks that dealmaking and IPOs are dominating headlines so far this morning, even though there is nothing earth-shattering.

Sources from Brussels said Vodafone is set to secure EU approval for its $22 billion bid for Liberty Global's cable networks in Germany and central Europe, while in IPO news, Traton lowered its price range, Thyssenkrupp stuck to its elevator listing plans, while Swiss Re set the range for the flotation of its UK life assurance business.

Still in M&A, it also seems that a race to take control of Portuguese insurance firm Tranquilidade has reached a crucial point.

Meanwhile in France, President Macron said there's no need to lower the government's stake in Renault and that he wants the Nissan alliance to strengthening its synergies.

Anyhow, here's your full early morning headlines roundup:

Vodafone set for EU go-ahead on Liberty Global deal - sources

VW's Traton sets price range for IPO at 27-28 euros a share

Thyssenkrupp sticks to elevator listing plan amid bid talk

Global Fashion Group lowers IPO offer price to 4.50 euros a share

Generali, Catalana in final race for $682 mln Portuguese deal - sources

Bayer seeks glyphosate litigation advice as Elliott reveals stake

France's Macron says no need to lower govt's stake in Renault

Hexagon CEO Rollen found not guilty of insider trading in appeals case

No breakthrough in Swiss-EU battle of the bourses

(Danilo Masoni)

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EUROPE SET TO BOUNCE BACK (0532 GMT)

The positive mood seen in Asia overnight following a report in the South China Morning Post (SCMP) that the United States and China have tentatively agreed to a truce in their trade war is set to spread to Europe this morning.

Spreadbetters at IG expect London's FTSE to open 6 points higher at 7,423, Frankfurt's DAX to open 42 points higher at 12,287, and Paris' CAC to open 12 points higher at 5,512.

On Wednesday the STOXX 600 fell 0.3%, suffering its fourth straight session of losses, on cooling expectations over aggressive rate cuts by the Fed and as caution over Sino-U.S. trade relations prevailed before this weekend's G20 summit, where Trump and Xi will meet.

Turning to the day ahead, Rabobank highlights that's going to be another session of session of second-tied data: "We only have Eurozone confidence surveys to look to, expected broadly unchanged and hence sending no new signals, and German CPI, seen 0.1% m/m, 1.3% y/y" and "There is another look at US Q1 GDP, but that’s very much yesterday’s story (and expected 3.2%)."

(Danilo Masoni)

***** ($1 = 0.8807 euros)