LIVE MARKETS-Tariff tit-for-tat: how far will it go?

* European stocks rise

* Utilities rally after RWE (IOB: 0FUZ.IL - news) , E.ON plan Innogy break-up

March 12 (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

TARIFF TIT-FOR-TAT (Shenzhen: 002433.SZ - news) : HOW FAR WILL IT GO? (1005 GMT)

We're arguably "back to square one" on globalisation, Bank of America Merrill-Lynch strategists say, with trade tariffs from the U.S. and the outcome of the Italian elections throwing doubt over the progress made in 2017.

The U.S. tariffs on steel and aluminium imports will have a very small near-term impact, but very uncertain ultimate endgame, BAML says, with retaliation likely.

Europe could target a range of U.S. exports including orange juice, cranberries, peanut butter, tobacco, as well as industrial products.

"If the tariff tit-for-tat ends here, as with the initial tariffs, the macroeconomic impact is likely to be quite small," BAML writes.

Noting, however, Trump's claim it would counter these tariffs with restrictions on autos, they add: "This would be the kind of escalation that could seriously damage business confidence."

Ironic, then, that the pick-up in global growth over the past two years is in part down to a revival in trade.

(Helen Reid)

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OPENING SNAPSHOT: UTILITIES RALLY (0814 GMT)

Stocks across Europe have opened strongly, with financials giving the biggest boost to the STOXX 600 as appetite for riskier parts of the market returns.

Utilities are the top-gaining stocks across country benchmarks as news of RWE and E.ON's break-up of Innogy boosts speculation of deal-making.

Suez (LSE: 0NRV.L - news) , EDP, Veolia, EDF (Paris: FR0010242511 - news) , and Italgas are all climbing on the news. Innogy itself jumped 15 percent.

(Helen Reid)

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WHAT YOU NEED TO KNOW BEFORE EUROPE OPENS (0745 GMT)

European shares are expected to open higher with futures on main country benchmarks up 0.4-1.1 percent following gains in Asia on the back of Friday's U.S. jobs report.

British engineer GKN (Frankfurt: 694194 - news) will be in focus after it agreed a $6 bln tie-up with Dana to help fend off Melrose (LSE: 136541.L - news) , which in response submitted an increased and final cash and paper offer for GKN.

Auto stocks could underperform after US President Donald Trump tweeted that if the EU retaliates against steel tariffs by placing higher tariffs on American goods, the US would "tax cars etc. FAIR!" link here: https://goo.gl/oJ2PBs

Also in the spotlight will be German utilities after RWE and rival E.ON announced plans to break up Innogy. E.On is seen up 6 percent in premarket trade.

We'll also be watching shares in Glencore (Frankfurt: 8GC.F - news) and Randgold after Congo's president signed a new mining code on Friday evening.

For other market moving headlines, see two posts below.

(Danilo Masoni)

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FUTURES POINT TO RENEWED RISK APPETITE (0719 GMT)

It's been a strong open for futures across the board, with gains of 0.4 to 0.8 percent - the DAX is leading the pack. This confirms spreadbetters' indications that Europe should start the week on the front foot, following the lead of Asian markets which rallied overnight.

(Helen Reid)

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EUROPEAN HEADLINES ROUND-UP (0710 GMT) GKN agrees $6 bln tie-up with Dana to help fend off Melrose Melrose makes increased and final offer for GKN Novartis (IOB: 0QLR.IL - news) says operations head Wyss resigning, names three to executive panel "No deal" Brexit could cost UK, EU companies 58 bln pounds -report Facing break up, Innogy unveils further costs cuts RWE, E.ON reshape German power sector in Innogy asset swap deal UAE's ADNOC says awards Italy's Eni (LSE: 0N9S.L - news) stakes in new oil concessions UBS (LSE: 0QNR.L - news) sees "business as normal" as it contests Hong Kong suspension Polish bank PKO Q4 profit up 38 pct, largely in line with forecast Dutch wholesaler B&S valued at 1.22 bln-1.49 bln euros in IPO Deutsche Bank (IOB: 0H7D.IL - news) values asset management at up to 7.2 bln euros in IPO Prada (HKSE: 1913-OL.HK - news) shares soar 20 pct as firm returns to sales growth Norway's Hydro says Brazil plant made unauthorised spills France's Areva (LSE: 0P4A.L - news) to pay $554 million to settle Finnish reactor dispute Regeneron/Sanofi (LSE: 0O59.L - news) offer new Praluent pricing to break reimbursement logjam Geely chairman says Daimler (IOB: 0NXX.IL - news) synergies "no precondition" - Bloomberg

MORNING CALL: EUROPEAN SHARES SEEN UP (0630 GMT)

European shares are expected to open higher this morning, tracking gains in Asia overnight.

A relief rally swept across Asian share markets after the latest U.S. jobs report managed to impress with its strength while also easing fears of inflation and faster rate hikes, a neat feat that whetted risk appetites globally.

Here are your morning calls, courtesy of CMC Markets (LSE: CMCX.L - news) :

FTSE: 3 points higher

DAX 50 points higher

CAC: 21 points higher

(Danilo Masoni)

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