LIVE MARKETS-Time to buy UK stocks?

* European stocks rise amid optimism ahead of Fed speech * STOXX 600 up 0.6%; oil & gas only sector in negative territory * FTSE 100 on track for worst month in four years * Peppa Pig owner shares soar on Hasbro takeover Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Josephine Mason. Reach her on Messenger to share your thoughts on market moves: josephine.mason.thomsonreuters.com@reuters.net TIME TO BUY UK STOCKS? (0937 GMT) FTSE 100 is on track for its worst monthly performance in four years as UK equities have been a no-go zone for investors with "extreme" outflows amid the Brexit crisis. But, Credit Suisse believes stocks look "unusually cheap", arguing investors should be at least neutral on UK equities and sees FTSE 100 hitting 7,500 (+5% from current levels) by mid-2020. The Swiss bank sees value in cheap international plays with the bulk of their earnings coming from outside the UK and likes Ashtead, ABF and Ferrexpo on that front, while picking SSE and BT as strong domestic plays. "The UK market has high defensive exposure, and has thus historically been one of best-performing regions when global PMIs fall, but has significantly underperformed defensives in Europe due to Brexit," Credits equity strategists led by Andrew Garthwaite say. Here's a chart comparing UK utilities to their euro-zone peers (in USD): Credit Suisse has raised UK utilities to "overweight", saying the sector offers a dividend yield that is nearly 50% above that of their European peers. The recent underperformance was mainly due to a threat of nationalisation under a Labour government if there was a general election and weak sterling. It however expects sterling to be range bound from here and while there is a high chance of a general election, the opposition left-wing party aren't doing so well in the polls. Price-to-earnings valuations have been sliding this year and UK utilities now trade on an 13% discount to euro-zone utilities, nearing the discount of 13.7% hit in March last year and returning to the lows seen in 2008. The strategists are also "overweight" on UK airlines seeing the sector a play on a 'positive' Brexit outcome. UK airlines have underperformed since Brexit on worries if they will be able to continue to operate in the euro area, but Credit Suisse says the "risk is extremely small even in the event of a hard Brexit" as there are some agreements in place. Finally, Credit Suisse is bearish on UK homebuilders, saying it doesn't expect house prices to increase much from here. (Thyagaraju Adinarayan) ***** OPENING SNAPSHOT: RISK-ON AHEAD OF FED SPEECH (0728 GMT) Investors are piling into riskier assets this morning buoyed by optimism that Fed chair Powell will strike a dovish tone in his Jackson Hole speech later this afternoon even as some market participants caution the market may be getting ahead of itself. The pan European STOXX 600 and euro-zone benchmark are up 0.5% in early deals, with only the oil & gas index in negative territory. Among individual moves, Rockwool International is down 16% at the bottom of the pack and its lowest in two years after Q2 results, while SimCorp is the top gainer after it upgraded its earnings outlook, while ThyssenKrupp is up more than 4% after a report it's looking to buy metals distributor Kloeckner & Co. Entertainment One is on a tear after Hasbro offered to pay a 26% premium in cash for the Peppa Pig-owner. Its shares are trading above the offer price, up 29%. (Josephine Mason) ***** ON OUR RADAR: CARTOON PIGS, STEEL DEALS AND POWELL (0557 GMT) European stock futures are flying high in early deals amid hopes that Fed chairman will deliver a resoundingly dovish speech later today that will signal the start of a sustained easing cycle. Whether that's realistic remains to be seen given the U.S. central bank has insisted the July cut was a mid-cycle adjustment rather than the start of further easing. But for now, investors are embracing the optimism and the Eurostoxx futures are up 0.8%, while London stock futures are up 0.7% recovering from yesterday's heavy sell-off after the pound rally. "To say that the stakes are high for the meeting is an understatement," says Jasper Lawler, head of research at London Capital. There may be some tidying up of portfolios ahead of the long UK bank holiday weekend too. Aside from the wild intraday swings with investors reacting knee-jerk to headlines at home on everything from fiscal stimulus, Brexit and Italy's political tumult, the pan European market has had a pretty decent week and is on track for its best week in two months. Still both the European benchmark and its euro-zone counterpart are heading towards a 3% drop for August, only its second monthly drop this year roiled by U.S. President Trump's shock decision to impose fresh tariffs on Chinese imports. It feels like a long time ago now and of course he's backtracked, but the latest salvo in the protracted dispute has kept investors on the summer sidelines. In corporate news, news that the owner of the popular (with kids and adults from the UK to China) Peppa Pig cartoon will be sold to Hasbro for $4 billion in cash has caught most attention. That's a tasty 26% premium to yesterday's closing price and Entertainment One shares are expected to rally. For Hasbro, it's a major step towards gaining access to the lucrative infant and preschool market. Shares in Kloeckner & Co are soaring 18.8% in premarket trading after a newspaper said Thyssenkrupp was in talks to buy the metals distributor to strengthen its materials trading business, citing sources familiar with the matter. Thyssenkrupp, which had its best day in months yesterday, is up 2.2%, making the stock the biggest gainer in the country's DAX top-30 index. The report is giving other steel stocks a lift too amid hopes of more dealmaking - Salzgitter shares are up 3% in premarket trade. A largely negative note from influential bank BAML on the European autos sector including Daimler, Volkswagen, Continental and Pirelli is likely to weigh on the battered industry. Early headlines: Eddie Stobart CEO steps down, asks for shares suspension Commerzbank discussing more job cuts - newspaper French mayors ban glyphosate weedkiller, defying government Thyssenkrupp in talks to buy steel trader Kloeckner - Handelsblatt U.S. SEC fines Deutsche Bank $16 mln to settle foreign corruption charges Adyen founders selling 15 percent of their holdings Hasbro takes home Peppa Pig, PJ Masks in $4 bln eOne deal INTERVIEW-Restructuring at Osram will include job cuts - AMS GRAPHIC-AQR, Marshall Wace lead hedge funds to benefit from Europe bank slide BT Group in talks to sell Irish corporate business -Sky News (Josephine Mason) ***** HOPING FOR CLARITY, EUROPE BRACED FOR POWELL SPEECH (0523 GMT) Fed chairman Jerome Powell's speech later today at 1400 GMT will capture most of the market's attention today, and keep stocks volatile ahead of it. Some investors say his address at the Jackson Hole symposium may well disappoint because the market is expecting, or rather hoping, that he'll give clear guidance that rates will be going lower. But the FOMC minutes on Wednesday and recent comments from central bankers suggest the Fed may not be in a rush to declare the start of a sustained easing cycle. "It would be remarkable if he veered too far towards telegraphing additional mid-cycle adjustments at the upcoming meetings in September or October, let a lone a full-blown easing cycle," says John Velis, forex and macro strategist for the Americas at BNY Mellon IG financial spreadbetters are calling London's FTSE to open 28 points higher at 7,156, Frankfurt's DAX to open 57 points higher at 11,805, and Paris' CAC to open 27 points higher at 5,415. (Josephine Mason) ***** (Reporting by Danilo Masoni, Josephine Mason and Thyagaraju Adinarayan)