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LIVE MARKETS-Time to chase "unloved" part of market

* STOXX 600 dips 0.3% * Irish banks fall on Sinn Fein election score * NMC Health surges on bid approach * Exor up on PartnerRe sale Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters. You can share your thoughts with Thyagaraju Adinarayan (thyagaraju.adinarayan@tr.com), Joice Alves (joice.alves@tr.com), Julien Ponthus (julien.ponthus@tr.com) in London and Danilo Masoni (danilo.masoni@tr.com) in Milan. TIME TO CHASE "UNLOVED" PART OF MARKET (1038 GMT) In the last week of January, world stocks showed signs of stress from the coronavirus, falling 2.2%, but in no time they bounced back and now we're talking about stocks being in an "overbought" territory with last week's stellar 2.7% rebound rally. Under the surface, the hardest-hit were the China-exposed assets and cyclicals threatened by a global growth slowdown. That widened the gap between Value and Growth stocks. The three trades that have dominated global stock markets in this low growth, low interest rate environment are large over small, defensives over cyclicals and growth over value, Morgan Stanley's Michael Wilson writes. Wilson says this has created "tremendous" dispersion in the markets between the winners and losers, but highlights that these trades are now "crowded". Morgan Stanley's team, mirroring several others, believe this coronavirus scare will only delay the global recovery but won't "derail" it. "If that’s right, these unloved parts of the market may finally be ready to outperform in a more sustainable fashion." "Since June 2018, we have fought the urge to trade these short-lived rallies and recommend cyclicals or small-caps, but we have to admit we’re intrigued by this latest correction and the evidence suggesting that the global economy could snap back quickly once the economic headwinds from the coronavirus fade." (Thyagaraju Adinarayan) ***** HOPING THE VIRUS INFECTION RATE SLOWS DOWN INDEED (0947 GMT) The main explanation for the somewhat intriguing resilience of stock markets is the widespread assumption that the new coronavirus' infection rate will slow down. The latest data seems to validate that analysis at the moment and many are relying on it to fine tune their risk-on / risk-off gauge. "The data imply that the spreading of the epidemic could stall by the end of February", Generali Investment's Market Spinner note read this morning. "Therefore, we view last week's equity market improvement as backed by fundamentals and continue to see the epidemic as a buying opportunity", they add. Other optimistic views could be found this morning. "Despite the ongoing uncertainty, we continue to filter out the short-term noise and remain overweight emerging market equities", Mark Haefele, Chief Investment Officer at UBS Global Wealth Management wrote. "We continue to monitor the risks to our position, we are optimistic that the decisive actions taken by governments will bring the outbreak under control". Here's our own chart of how world markets have reacted and the infection rate on a logarithmic scale. (Ritvik Carvalho and Julien Ponthus) ***** OPENING SNAPSHOT: IRISH SENSATION (0848 GMT) The results of the general election in Ireland with Sinn Fein now demanding to be part of the next government is moving stocks big time in Dublin. The top two losers on the STOXX 600 are Bank of Ireland Group and AIB Group down 5.3% and 3.9% respectively while the Irish nationalists, having secured the most votes, are celebrating what they see as ballot-box "revolution". ISEQ is underperforming its European peers with a 1% fall while the overall market is limiting its losses to about 0.3% as uncertainties about the coronavirus uncertainties still loom. Among individual stocks NMC Health has indeed reclaimed the spotlight among individual stocks with a bid approach that is lifting its shares up 14%. M&A is also pushing Italy's Exor up 4% with a possible incoming offer by France's Covea for ParterRe. For a change, here are the top ISEQ movers this morning: (Julien Ponthus) ***** ON THE RADAR: NMC HEALTH (AGAIN), INTU AND PARTNER RE (0750 GMT) Shares in NMC Health are back again under the spotlight this morning with preliminary approaches from U.S.-based KKR & Co Inc and GK Investment Holding Group, weeks after the healthcare group came under a short-selling attack from Muddy Waters. Talking about the latter, it has just issued a statement calling Burford Capital’s latest trading update “abysmal”. Meanwhile, troubled UK shopping centre operator Intu Properties is in discussions with its largest shareholder to raise funds to shore up its balance sheet. In auto woes, we have a big news report over the weekend that Daimler is planning to cut up to 15,000 jobs. A possible big M&A move in the insurance sector with Investment group Exor in talks to sell reinsurer PartnerRe to France's Covea in a deal worth around $9 billion. Among Q4 trading updates, German’s software company TeamViewer posted 46% growth in fourth-quarter core profit. Bad news and another setback for Roche whose experimental drug gantenerumab failed to slow cognitive decline in people with a rare inherited form of Alzheimer's disease. (Julien Ponthus) ***** MORNING CALL: PRUDENCE PREVAILS (0625 GMT) European stock markets are expected to open just slightly in the red with the looming uncertainties regarding the impact of the coronavirus keeping investors on their toes. Asian markets pared some losses as workers began trickling back to offices and factories around China but the overall sentiment remained jittery. Financial spreadbetters expect London's FTSE to open 10 points down, Frankfurt's DAX down 10 points too and Paris' CAC to lose 7 points. EURO STOXX 50 futures are currently trading down 0.13%. (Julien Ponthus) ***** (Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)