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LIVE MARKETS-STOXX at lows, eyes on tariffs, German government

* European shares hit fresh day low

* US unveils tariffs against China

* Rolls Royce (LSE: RR.L - news) soars to 4-year high

* Indivior (Frankfurt: 2IVA.F - news) sinks on generic drug threat

* Bundesbank slashes Germany's growth forecast

June 15 (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

STOXX AT LOWS, EYES ON TARIFFS, GERMAN GOVERNMENT (1337 GMT)

European shares have fallen to fresh day lows, down 0.8 percent with investors keeping an

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eye on developments in the trade spat between the U.S. and China after the White House announced

25 percent tariff on Chinese technology.

"What you've seen today on European equity markets is a reaction to yesterday's very

positive developments which were based on the strong dollar move," said Christian Stocker,

equity strategist at UniCredit (EUREX: DE000A163206.EX - news) in Munich, while noting there were broader concerns among

investors that the trade dispute between U.S. and China could escalate.

"Should China retaliate with new tariffs on U.S. products that could be the start of a more

serious problem," he said.

Meanwhile in Germany, an ally of chancellor Angela Merkel said her conservative alliance may

splinter in a row over immigration, as the third party in her fragile government suggested its

patience was wearing thin.

(Danilo Masoni)

*****

UK M&A BOOM IN NUMBERS: DEAL VALUE HITS 11-YEAR HIGH (1123 GMT)

Brexit, what Brexit? U.S., European and Japanese buyers are lining up to buy UK companies

which a depreciated sterling has made relatively cheap. UK M&A involvement hit an 11-year high

of $551 billion in the past 12 months, thanks to a record $262 billion in acquisitions by

foreign firms, Thomson Reuters (Dusseldorf: TOC.DU - news) data shows.

The figure covers deals done from June 23 2017 to June 13 2018 compared to the years before

Brexit. The year 2006-2007 was the last time it was higher, when there was more than $700

billion of buy-ups with UK involvement.

Deals in consumer staples and media & entertainment dominated this past year, accounting for

71 percent of the total value, with firms from the U.S. and the Netherlands top buyers.

Year-to-date the figures are even more impressive. Dealmaking activity is up more than

three-fold compared to a year ago, totalling $265 billion from 1,109 transactions.

(Helen Reid)

*****

AWAITING TRUMP'S TARIFF ANNOUNCEMENT (1015 GMT)

European shares have turned slightly lower as the euro is now bouncing back

against the dollar after yesterday's sell-off and as U.S. President Trump's announcement on

tariffs against $50 billion of Chinese goods gets closer.

While that's not scaring off investors, it's certainly making them more cautious, the main

concern being China's retaliation and whether its response will lead to a further escalation.

"China has already said that it will respond in kind. However, it seems unlikely that the

U.S. will back off... there is a growing bi-partisan consensus in Washington that 'something

needs to be done about China'," says Michael Every, senior Asia-Pacific strategist at Rabobank.

Every also points to this Wall Street Journal report (U.S. Airlines Unbowed by Beijing's

Demand to Call Taiwan Part of China https://www.wsj.com/articles/u-s-airlines-arent-complying-with-beijings-demand-they-call-taiwan-part-of-china-1528968606)

to say: "That promises some interesting market movements ahead, to put it mildly."

At this stage it remains unclear when Trump would activate the tariffs but for all the

background, read our WRAPUP: Trump ready to impose tariffs on about $50 bln in Chinese goods

(Danilo Masoni)

*****

SEPARATING THE WHEAT FROM THE CHAFF IN UK RETAILERS (0934 GMT)

Among UK retailers, there are many cheap stocks - but not all represent value.

Liberum analysts attempt to sort the "value" from the "value traps" in general retail, a

sector which has still not recovered from the huge falls it suffered on the Brexit vote.

Yesterday's retail sales data, which smashed all forecasts likely helped by sunny weather

and the royal wedding, spurred some renewed hope for the sector, however.

But where to wade in?

On Liberum's measures which combine growth, dividends, balance sheet health and cash flow,

they find Card Factory (Frankfurt: A114CM - news) , Superdry and Topps Tiles (LSE: TPT.L - news) rank highest while M&S, Dixons Carphone (Frankfurt: CWB.F - news) and

Debenhams (Frankfurt: D2T.F - news) rank lowest.

"The retail sector is at a crossroads, with structural shifts accelerating driven by changes

in consumer habits... The winners will be those that are implementing clear, well thought-out

strategies for a reality where data and the insight it provides form the new frontier. Those

underinvested and underprepared risk losing significant market share," wrote the Liberum team.

All this against a backdrop of tight household finances and a decline in footfall means UK

retailers are battling on many fronts at once.

(Helen Reid)

*****

OPENING SNAPSHOT: ROLLS ROYCE SURGES, INDIVIOR SINKS (0729 GMT)

The ECB rally is petering out somewhat today though Europe's main benchmark is still up 0.2

percent and Germany's DAX is shrugging off the Bundesbank's slashed growth forecasts, up 0.4

percent. The bank-heavy Italian and Spanish indexes however are underperforming as the banking

sector falls.

Some big movers today grabbing investors' attention.

Indivior is sinking 14 percent after Dr Reddy's Laboratories received FDA approval

to launch a generic version of its Suboxone Film drug.

"Indivior can seek an injunction to try and halt a launch, and if successful on appeal it

would be eligible for damages," said Jefferies analysts.

BTG (Frankfurt: 908827 - news) is also down 4.7 percent after the FDA voted against approval of its Elevair drug.

Rolls Royce is shooting up 13 percent, having already climbed 6 percent yesterday, after the

engine maker stuck to its 2018 guidance despite an increase in costs due to problems with its

Trent (BSE: 500251.BO - news) 1000 engine. Its gains take the stock up to a two-year high.

And H&M meanwhile is falling 3.9 percent after its local currency sales figures slightly

missed expectations.

Tesco (Frankfurt: 852647 - news) shares are up 1.9 percent after its sales figures.

Banks, which were the only sector left out of the sharp market rally yesterday, are the

worst performers once again today. Autos meanwhile are up 1 percent, leading the market

again. A weak euro helps the sector which seems to, for the moment, not be pricing in any

anxiety over Trump's plans to unveil a revised tariff list today.

(Helen Reid)

*****

EUROPEAN RALLY SET TO LOSE STEAM, EYES ON TESCO (0652 GMT)

The ECB-induced rally in European shares is set to lose steam today as investors reassess

the central bank's message and some caution steps in before Trump unveils a revised tariff list

against China later in the day. Euro zone futures are trading between flat and a 0.1 percent

gain, while FTSE futures lag, down 0.2 percent.

Yesterday's gains however have put the STOXX 600 firmly on track to snap a three-week losing

streak. The pan-European index is up 2 percent so far this week.

Meanwhile the Bundesbank has slashed Germany's growth forecast for this year, adding to

sings of a slowdown in the euro zone economy.

On the corporate front, eyes on Tesco after Britain's biggest retailer said

underlying sales in its home market rose in the first quarter, though at a slightly slower pace

than before, partly reflecting adverse weather at the start of the period. Its shares are up 1-2

percent in premarket.

Other stock movers: H&M Q2 local-currency sales unchanged, just below expectations;

Rolls-Royce sticks to 2018 guidance despite rise in Trent 1000 costs; Novartis (IOB: 0QLR.IL - news) touts

effectiveness, safety of autoimmune drug copies

For more headlines check out the previous post:

(Danilo Masoni)

*****

EARLY MORNING HEADLINE ROUNDUP (0554 GMT)

Engie (LSE: 0LD0.L - news) 's Luxembourg tax deal set to be declared illegal aid - source

BHP approves $2.9 billion spend on iron ore project

UK regulator Ofcom concerned by BT's involvement in Openreach's planning process

Norway approves merger of payments services Vipps, BankID, BankAxept

Deutsche Bank (IOB: 0H7D.IL - news) sells $1 bln non-performing ship loan portfolio -sources

France's Teleperformance (Paris: FR0000051807 - news) agrees $1 bln deal to buy Intelenet from Blackstone (NYSE: BX - news)

Construction company CRH (EUREX: 558474.EX - news) agrees to conditions to acquire Ash Grove

Investor Benko strikes deal to buy Steinhoff's Austrian unit

Molecular Partners (IOB: 0QXX.IL - news) says 5 of 8 patients responded in multiple myeloma trial

OC Oerlikon to float up to 100 pct of drive-systems unit in IPO

Swiss steelmaker Schmolz & Bickenbach (IOB: 0QPH.IL - news) launches bond after chairman cuts Vekselberg ties

MEDIA-Rolls-Royce on track to exceed 1 bln stg in free cash flow by 2020 - FT

RBS (LSE: RBS.L - news) ' Ulster Bank says to refund 18,000 overcharged business customers

And here's our story about the tariffs against China that Trump is set to unveil today and

could put a cap on market gains: Trump ready to impose tariffs on about $50 bln in Chinese

goods-official

(Danilo Masoni)

*****

MORNING CALL: EUROPEAN SHARES TO BUILD ON ECB-INDUCED RALLY (0525 GMT)

European shares are expected to open marginally higher this morning building on a strong

rally in the previous session after the European Central Bank pushed back rate expectations.

Financial spreadbetters expect London's FTSE to open 6 points higher at 7,772, Frankfurt's

DAX to open 35 points higher at 13,142 and Paris' CAC to open 4 points higher at 5,532.

Over in Asia, shares wobbled as investors braced for U.S. tariffs against China, while the

euro flirted with two-week lows after a cautious European Central Bank indicated it would not

raise interest rates for some time.

* ECB pledges to keep rates at least until mid-2019; euro dives

* Trump to impose $50 bln tariffs on China; China vows to confront

* BOJ stands pat as expected, Kuroda press conference coming up

(Danilo Masoni)

*****