LIVE MARKETS-Trade wars: what's the damage?

LONDON, April 4 (Reuters) - Welcome to the home for real-time coverage of European equity

markets brought to you by Reuters stocks reporters and anchored today by Julien Ponthus. Reach

him on Messenger to share your thoughts on market moves:

julien.ponthus.thomsonreuters.com@reuters.net

TRADE WARS: WHAT'S THE DAMAGE? (0900 GMT)

After the latest development in U.S.-China trade tensions, with Beijing announcing

additional tariffs on $50 billion of U.S. goods, BNP Paribas Asset Management strategists detail

two possible scenarios: a multilateral trade war and a bilateral U.S.-China trade war.

Under the multilateral trade war scenario, they expect:

- equity indices to fall by around 15-20%

- multinationals and tech companies hit the hardest

- fixed-income markets to be bid up from flight to quality

- Yen and Swiss franc to benefit too, while EM FX depreciates

If events develop into a U.S.-China trade war, they see similar moves in FX markets, but a

sharper move in equities:

- global equity markets to fall by between 30 and 50%

- tech, multinationals and commodity producers worst-performing

They also warn "such a shock is likely to trigger further pressures in the Eurodollar market

which could seriously disrupt banking and financial flows."

The trillion-dollar question will be what China might then do with its 1.2 trillion in U.S.

Treasuries.

BNPPAM emphasise the probability of a full-blown trade war is still low, but "the prospect

of increasing trade tensions... is likely to require higher risk premiums for a wide range of

assets".

(Helen Reid)

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OPENING SNAPSHOT: A MEEK START FOR EUROPEAN SHARES (0730 GMT)

European shares have pulled into negative territory after a broadly flat open as cyclical

stocks such as financials and miners weigh, while tech is the biggest sectoral faller.

Among individual stock movers, shares in ad firm WPP (Frankfurt: A1J2BZ - news) are down around 3 percent after

the company said that it was going to probe an allegation of personal misconduct against its

chief executive, Martin Sorrell, who denied wrongdoing.

Aside from that, Q1 results are boosting shares in German IT-leasing specialist Grenke

.

So it's pretty quiet. Let's see what the release of March flash inflation figures for the

Euro zone brings later on in the session.

Here's your opening snapshot:

(Kit Rees)

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WHAT'S ON OUR RADAR FOR THE EUROPEAN OPEN (0638 GMT)

There’s no clear direction set yet for the open as investors need to decide whether they

should or shouldn't worry about an escalation in the trade war saga or whether FANGs and tech

stocks are finally set for a beating.

On the latter, the successful listing of Spotify is definitely seen as good news and there

were encouraging headlines for the sector: the largest American business (Other OTC: ARBU - news) lobby group came to the

defense of Amazon after a multi-day Twitter (Frankfurt: A1W6XZ - news) attack by Trump, Samsung is set to forecast a near

50 percent jump in quarterly profit and Tesla's share price rose after the company denied it

needs to raise fresh capital.

Here are a few headlines which might have an impact:

* Ad group WPP to probe alleged misconduct by CEO Sorrell, who rejects accusations

* Swiss Re (LSE: 0QL6.L - news) says SoftBank (Swiss: SOFB.SW - news) stake won't exceed 10 pct, talks at early stage

* UK's Topps Tiles Q2 sales dip on colder weather, softer market

* LafargeHolcim (LSE: 0QKY.L - news) says Schmidheiny to step down from board

* Smith & Nephew (Frankfurt: 502816 - news) names Namal Nawana new CEO

* UK shop prices fall at fastest pace in over a year - BRC (Shanghai: 600466.SS - news)

* U.S. unveils tariffs on $50 bln worth of Chinese imports

* Strong economy, discounts boost automakers U.S. March sales

* Spotify shares jump in record-setting direct listing

(Julien Ponthus and Kit Rees)

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FUTURES FOR EUROPEAN BOURSES GO SIDEWAYS (0614 GMT)

It seems European bourses are set to open sideways this morning as there still isn't any

clear directional trend.

FTSE and IBEX futures are slightly down, while DAX and CAC futures are in positive

territory:

(Julien Ponthus)

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MORNING CALL: NO CLEAR DIRECTION SEEN AT THE OPEN YET (0515 GMT)

Good morning and welcome to Live Markets.

Financial spreadbetters expect London's FTSE to open 8 points lower but are slightly more

optimistic for Frankfurt's DAX and Paris' CAC, which are seen opening 25 points and 5 points

higher respectively.

Asian shares faltered overnight as simmering fears of a Sino (Dusseldorf: 1205802.DU - news) -U.S. trade war overshadowed a

bounce on Wall Street and left investors reluctant to take positions in anything.

(Julien Ponthus)

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