LIVE MARKETS-Supply shock shakes up oil market focused on sluggish demand

* STOXX 600 turns positive, up 0.2% * Oil stocks get boost from crude price spike on oil tanker attack * 1&1 Drillisch jumps 7% after buying first ever 5G spectrum * Ferguson climbs 6.1% after Trian Investors take stake * Aurubis hits Oct. 2014 lows on profit warning, CEO exit June 13 - Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Helen Reid. Reach her on Messenger to share your thoughts on market moves: helen.reid.thomsonreuters.com@reuters.net SUPPLY SHOCK SHAKES UP OIL MARKET FOCUSED ON SLUGGISH DEMAND (1048 GMT) Oil stocks got a boost this morning from a sharp jump in crude prices after two oil tankers were struck in suspected attacks in the Gulf of Oman. Here's the latest on that developing story: Though that spike has come down slightly now, and Europe's oil & gas index with it, it's reminded investors of the everpresent risk of a geopolitical supply shock to a market which has been in a deep slump over the last couple of months. With the trade war re-ignited and shovelling sand into the gears of the global economy at the moment, Brent crude sank below $60 a barrel just yesterday. "Over the past few weeks we've been very much in a demand-driven price environment," says Jack Allardyce, analyst at Cantor Fitzgerald in Edinburgh. "It seems to be all about Trump and whoever he's threatening with tariffs or sanctions, and of course we've got one eye on OPEC and what they do at the end of this month." OPEC has just cut its forecast for growth in global oil demand due to escalating trade tensions, and pointed to the risk of a further reduction. However, Allardyce says, the tanker attacks and resulting spike in crude prices could focus investors' minds once more on the supply piece of the puzzle. "It's all fine speculating about what Trump's actions and sabre-rattling are going to do to demand, but the near-term supply picture may surprise the market a little bit. It's probably a bit tighter than the market is giving it credit for," he adds. This might tempt investors to look again at oil majors' shares after a rough couple of weeks, he reckons. One interesting marker of the divergence in the supply picture on either side of the Atlantic is the spread between WTI and Brent crude prices. As you can see below, that's been rising: (Helen Reid) ***** THE GREAT EUROPEAN TELECOMS CARVE-UP! (0952 GMT) And the great carve-up of Europe's largest telecoms market has started with explosive moves in the stock market this morning. Shares in 1&1 Drillisch are up 7% and its parent United Internet is up 5%. Both are off earlier highs, but far outperforming their larger rivals. The gains come as the upstart German company has grabbed a slice of the nation's 5G network in yesterday's auction that drew in bigger-than-expected bids. That takes it a step closer to becoming Germany's No. 4 mobile operator, potentially rivalling the telecoms market long dominated by the Big Three: Deutsche Telekom, Vodafone and Telefonica Deutschland. Shares in those established players are all proving surprisingly resilient this morning despite the higher-than-expected bidding levels. UBS analysts say share prices had already priced in an expensive auction and a mobile network build by Drillisch. It's worth noting though that out of the Big Three Plus One, Deutsche Telekom's stock is still the star performer over the past year - it's up 14%, compared with Drillisch's 53%. While the Drillisch win in the 5G auction could carve up the German telecom sector in the long run, the rally in telecom shares is already reshuffling the stock market this morning: telecoms are no longer the worst-performing sector in Europe! That honour now goes to banks, which continue to suffer from expectations ultra-low interest rates - which are hurting profits - are here to stay. (Josephine Mason) ***** HONG KONG PROTESTS COULD HIT LUXURY SECTOR (0846 GMT) Protests in Hong Kong over a Chinese extradition bill have escalated over the past few days, with Asia-exposed banks StanChart and HSBC falling in London trading yesterday. Another area with obvious sensitivity to the political unrest in the ex-British colony is luxury. UBS analysts Julie Zhang and Helen Brand see the following Hong Kong exposure for Europe's main luxury stocks: Richemont (11%), Swatch (10%), Burberry (9%), Hermes (8%), Kering (7-8%), 6% for LVMH, Moncler, Prada, Tod's, and roughly 5% for Ferragamo, EssilorLuxottica, and Ferrari. Equita analyst Paola Carboni estimates Hong Kong accounts for 6% of the overall spending in luxury, down from 10% in 2013-2014, due to Chinese spending being redirected towards Europe and mainland China. "We thus believe the protests underway might be a disturbing element for the sector's stocks, but with marginal real impacts," she writes. LVMH's Duty Free Shoppers (DFS) unit could be impacted, though. Carboni estimates 50% of its business is through Chinese tourism, mainly in HK, but the unit is not a big contributor to the group's overall margins. All things considered, she remains a buyer of Moncler, LVMH, and Kering. Below you can see the luxury sector's remarkable run so far in 2019 after trade wars sank the stocks last year. There's been a small dip since the Hong Kong protests started, but the impact has been pretty negligible so far: (Helen Reid) ***** TELECOMS TAKE THE LEAD AFTER 5G AUCTION, EUROPEAN STOCKS SLIP (0730 GMT) European shares are edging down in early deals with banks leading the falls as investors' expectations of rate cuts from the Fed hurt lenders which benefit from higher interest rates. The market's pricing of a dovish turn from the world's leading central banks has helped equities higher over the past week, but stocks have paused as investors cash in gains and face up to lingering concerns over growth. Telecoms are the top-performing, up 0.5% after Germany's 5G mobile spectrum auction. 1&1 Drillisch shares are jumping 12% with parent company United Internet up 8.7%. Telefonica Deutschland is up 3.1%, with Deutsche Telekom bringing up the rear, up only 0.6%. All this excitement in telecoms has helped the sector overtake banks in year-to-date returns. Telecoms are now down just 0.1% year-to-date, against a 0.2% fall for the banks sector. Aurubis, Europe's largest copper producer, is down 10.1% after it warned on profits late yesterday and said its CEO would leave immediately. Ferguson shares are up 5.5%, top of the FTSE 100, after Trian Investors 1 took a stake in the UK plumbing products company, saying it is more attractively valued than U.S. peers. French aerospace and defense company Thales is up 2.1% after it hiked its profit targets, saying its acquisition of chipmaker Gemalto helped it perform better. (Helen Reid) ***** WHAT'S ON THE RADAR: 5G WINNERS AND LOSERS, NORD STREAM 2 SANCTIONS THREAT (0657 GMT) European stocks are set to extend their falls today though futures are down just 0.2-0.3%, leaving room for the market to potentially stage a recovery later in the session. Comments from China's Vice Premier Liu He that Chinese regulators should step up support for the economy and keep ample liquidity in the financial system could provide a silver lining for the market if they’re a prelude to Beijing unveiling more stimulus policies. A milestone in Europe’s transition to 5G was reached with Germany raising 6.55 billion euros from its 5G mobile spectrum. Shares in new entrant 1&1 Drillisch are seen jumping 7-11% with parent company United Internet also up 7%. 1&1 Drillisch, until now a 'virtual' mobile player controlled by United Internet, paid 1.07 billion euros for 70 MHz, bringing billionaire CEO Ralf Dommermuth closer to his dream of running Germany's fourth operator. Traders also expect Telefonica Deutschland to rise 4% after the operator bought a 90 MHz spectrum for 1.43 billion euros. Shares in French semiconductor wafer maker Soitec are seen rising 1-5% after its full-year revenue and earnings figures beat expectations. UK plumbing products maker Ferguson is expected to gain 2-3% after Guernsey-domiciled investment trust Trian Investors 1 said it acquired a 5.98% stake in the company. One trading desk also says Gazprom's UK-listed shares could be hurt by U.S. President Donald Trump considering sanctions over Russia’s Nord Stream 2 natural gas pipeline. Another potential victim could be Italian oil company Eni, traders said, although a jump in crude prices after reports of a tanker attack in the Gulf of Oman may offset the impact. French aerospace & defense firm Thales is seen up 2% after it upped its profitability targets to factor in the contribution from recently acquired chipmaker Gemalto. Britain's biggest retailer, Tesco, is expected to fall 1-2% after its sales growth missed the street’s estimates, coming in at 0.4% against expectations for 0.8% growth. (Helen Reid) ***** FUTURES SLIP: EYES ON GERMANY'S 5G AUCTION, THALES, TESCO (0625 GMT) Futures for the main regional stock markets are down 0.2-0.3% in early deals as investors' deflating sentiment, and sliding oil prices, take their toll on stock prices. There was a potential silver lining as China's Vice Premier Liu He said regulators should step up support for the economy and keep ample liquidity in the financial system, suggesting Beijing may soon unveil more policies to bolster growth amid trade war pressure. In Europe, a milestone in transition to 5G was reached late yesterday, when Germany announced it raised 6.55 billion euros ($7.4 billion) from its 5G mobile spectrum auction after a near three-month battle that will see a fourth operator enter the market. Deutsche Telekom has complained about the high price and said the auction leaves a "bitter aftertaste". New 5G entrant 1&1 Drillisch is seen rising 11%, its parent United Internet is indicating 7.1% higher, while Deutsche Telekom is expected to fall 0.2%. In results news, French semiconductor wafer maker Soitec reported a sales target of around 900 million euros for the full year 2022, which dealers say will spur a rally in the shares. Aerospace & defense firm Thales upped its profitability targets to factor in the contribution from recently acquired chipmaker Gemalto. Britain's biggest retailer, Tesco, said underlying sales growth slowed in its latest quarter partly due to a tough comparative number. And Guernsey-domiciled investment trust Trian Investors 1 said it acquired a 5.98% interest in Ferguson. Tesco's UK sales growth slows in latest quarter Germany raises 6.55 billion euros in epic 5G spectrum auction French group Thales raises profit targets after Gemalto takeover BRIEF-Soitec Eyes FY 2022 Sales Of Around EUR 900 Mln Credit Suisse, UBS have boosted capital positions - SNB BRIEF-Varta Says It Successfully Concludes Capital Increase CFM wins blockbuster jet engine order from IndiGo -sources Morrisons And Amazon To Expand Delivery Services To More Cities Across UK (Helen Reid) ***** LULL IN EUROPEAN STOCKS TO CONTINUE (0525 GMT) Europe's major stock indices are expected to continue their slide today as crude prices extend their decline and doubts over the interest rate outlook creep in. Asian shares were led lower overnight as the Hong Kong market fell for second consecutive session following a day of massive street protests, while oil prices flirted with five-month lows due to higher U.S. crude inventories and a bleak demand outlook. Financial spreadbetters at IG expect London's FTSE to open 17 points lower at 7,350, Frankfurt's DAX to open 21 points down at 12,094, and Paris' CAC to open 10 points lower at 5,365. (Helen Reid) ***** ($1 = 0.8850 euros) (Reporting by Helen Reid, Danilo Masoni, Josephine Mason and Thyagaraju Adinarayan)