LIVE MARKETS-Turning bullish on tech again

* European shares shrug off fractious G7

* Bank stocks lifted as Italy commits to euro

* UK factory output shows biggest monthly drop since 2012

June 11 - 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

TURNING BULLISH ON TECH AGAIN (1252 GMT)

It looks like high valuations and crowded positioning are no

longer a big worry for investors and after last week's record

run for the Nasdaq (Frankfurt: 813516 - news) , confidence is growing that 2018 will be yet

another strong year for European tech.

"In contrast to our view in Jan, we now believe that 2018

will make it seven straight years of outperformance for the EU

Tech sector. While we still see earnings in-line, we now expect

the sector to relatively rerate," says Citi.

Even (Taiwan OTC: 6436.TWO - news) though economic activity in Europe is set to slow this

year, that should not be a problem for the sector. Citi expects

healthy EPS growth for European tech in 2018 and notes how the

sector's valuation premium widens in times of weaker growth.

Over the last 7 years the European tech index has

more than doubled in value, leaving the broader European market

well behind. The index is up more than 10.5 percent so far this

year, while the STOXX 600 is down 0.7 percent.

Citi's top picks are SAP (Amsterdam: AP6.AS - news) , Capgemini,

ASML (Milan: ASML.MI - news) , Temenos and IQE (LSE: IQE.L - news) .

(Danilo Masoni)

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BLOCK TRADING BACK ON THE UP (1138 GMT)

The share of dark trading executed in large blocks has come

back up this week, having fallen the two previous weeks. As of

Friday June 8 it's 45.25 percent of the total traded on dark

pools, according to Fidessa. The share of dark trading executed

in large blocks has risen since MiFID II came into force,

restricting non-transparent trading for many stocks outside of

"large-in-scale" blocks.

The most traded stock in large blocks was RPC (NYSE: RES - news) with

78 trades, while the highest value traded was in Novo Nordisk (LSE: 0QIU.L - news)

- with 99 million euros' worth changing hands.

Market share remains hotly contested between the big block

trading venues, as you can see below. Liquidnet is currently in

the lead in terms of market share - with 28.7 percent of total

dark pool block trades - with ITG (Shanghai: 600755.SS - news) 's Posit second and the LSE's

Turquoise Plato in third place.

(Helen Reid)

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PRIVATE EQUITY FUELLED M&A BOOM (1043 GMT)

Shares (Berlin: DI6.BE - news) in UK car auctioneers BCA Marketplace (LSE: BCA.L - news) have

hit a record high this morning after the company rejected a

buyout offer from private equity firm Apax Partners.

It's the latest in a flood of attempted or completed

takeover deals targeting UK stocks, and according to Bernstein

analysts it's also in line with a broader, worldwide surge in

private equity dealmaking.

The share of deal activity taking companies private has

reached a high not seen since 2007, Bernstein's global

quantitative analysts find. Pension funds' allocation to private

equity has also increased in recent years.

"This is a classic sign of a business cycle moving towards a

"late expansion" phase," they write. "This increase in activity

tied to the remarkable jump in pension fund allocation to

private equity and increase in committed but uninvested capital

seems highly likely to dampen future returns from private

equity."

The rise in pension funds' allocation to private equity, and

the jump in dealmaking, are likely linked to a diminishing

breadth of growth opportunities in listed companies. The number

of listed companies is shrinking and buybacks are exceeding

issuance globally, Bernstein points out - meaning investors

increasingly need exposure to private assets in order to earn a

better equity risk premium.

(Helen Reid)

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A BANK-SHAPED HOLE IN THE EUROPEAN MARKET (1000 GMT)

While banks are the top performers today on relief over the

new Italian economy minister's pro-euro stance, they remain the

laggards over this year to date, down 11 percent.

UBS (LSE: 0QNR.L - news) analysts point out that they're the exception, leaving a

"bank-sized hole" in a strongly cyclical-led market.

"Given the move in yields, this pro-cyclical market should

not come as a great surprise," they write. If yields continue to

rise then cyclicals should too.

But the performance of cyclicals versus defensives is now

lagging yields significantly - which is all down to the banking

sector decoupling with yields (see chart below).

Why the lag? UBS reckons investors' concerns about growth

disappointment and trade disputes trumped the rising yield

narrative.

UBS however reiterate their overweight on banks, saying the

sector should catch up with the rest of the cyclical universe

thanks to a supportive long-term environment with domestic

growth, corporate releveraging, a rebound in capex, (slowly)

rising rates, and the potential for M&A.

Their top picks? Banco BPM, Credit Agricole (Swiss: ACA.SW - news)

, Credit Suisse (IOB: 0QP5.IL - news) , Danske Bank (LSE: 0NVC.L - news) , ING

, Lloyds, Santander and UniCredit (EUREX: DE000A163206.EX - news)

.

(Helen Reid)

*****

MID-MORNING SNAPSHOT: MOVING HIGHER (0937 GMT)

European shares have started the first day of the week

shrugging off the weekend's fractious G7 and a promise by

Italy's new economy minister to keep the country in the euro is

providing a big relief for Italian stocks.

In the UK, factory output showed its biggest monthly drop

since 2012, weakening the pound and boosting the export-oriented

FTSE index.

Here's your snapshot:

(Danilo Masoni)

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WHAT'S ON OUR RADAR AHEAD OF THE OPEN (0651 GMT)

European stock futures are indicating a strong start,

shrugging off the fallout from a tense G7 meeting over the

weekend with gains of 0.3 to 0.7 percent for the major

benchmarks.

At the start of a week packed with political and central

bank events, with an historic summit between the U.S. and North

Korea on Tuesday followed by Fed and ECB meetings, investors in

Europe are choosing to look beyond the G7 meeting Societe

Generale analysts branded “shambolic”.

They are also likely expressing relief that Swiss voters

rejected, by a landslide, a campaign to radically alter the

country’s banking system. The “no” vote pushed the Swiss franc

down, which could deliver a boost to Swiss exporting stocks. The

new Italian economy minister’s vow to stay in the euro and cut

debt levels was sending Italy’s bonds higher and is likely to

lure relieved investors back into Italian stocks, too.

M&A is still rampant in the UK stock market. Ones to watch

today include Inmarsat (Other OTC: IMASF - news) which, after a sharp rally on bid

speculation on Friday, confirmed after the close that it had

rejected a takeover offer from U.S. firm EchoStar.

British car auctioneers BCA Marketplace could also be moved

by news private equity firm Apax Partners is considering making

an offer for it. It’s not alone in the private equity dealmaking

space: Bernstein analysts said the share of deal activity taking

companies private has reached a peak last seen in 2007.

Ocado could also be a mover after a double upgrade to

“outperform” from Bernstein – a bold call for a stock already up

152 percent this year.

On the negative side, Daimler (IOB: 0NXX.IL - news) shares could be dented after

the Bild am Sonntag reported the German regulator found defeat

devices in its diesel cars. And Rolls Royce shares are indicated

down 1 percent after it said a problem affecting the durability

of its Trent (BSE: 500251.BO - news) 1000 engine had been discovered in another engine

type, requiring further inspections.

In other company news/potential stock movers:

German regulator found defeat devices in Daimler diesel cars

-BamS

Rolls-Royce says compressor issue found in different Trent

1000 engine

EDP sees merits in Chinese suitor's plans, but offer too low

(Helen Reid)

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FUTURES POINT TO MODEST GAINS AT THE OPEN DESPITE

"SHAMBOLIC" G7 (0609 GMT)

Futures for the leading European stock benchmarks are up 0.1

to 0.3 percent, indicating a stronger open.

There's not much on the macroeconomic front expected today

but Societe Generale (Swiss: 519928.SW - news) analysts say investors will be watching the

Bank of France business sentiment and UK construction and

manufacturing output - a slow start to a heavy week of political

and central bank events.

Here's SocGen (Paris: FR0000130809 - news) 's take on the G7 fallout: "After some initial

wobbles at the open, markets in Asia took the shambolic end to

the G7 summit in their stride, regardless of the fact that on

the surface the risk of a further escalation of U.S.

protectionist measures has increased."

And some extra headlines that could shake up trading, with

M&A still rampant in the UK market:

Comcast (Swiss: CMCSA.SW - news) to win unconditional EU okay for Sky (Frankfurt: 893517 - news) bid - sources

British watchdog probes reports that meat found in

vegetarian meals

Apax considering an offer for BCA Marketplace

Inmarsat rejects EchoStar takeover bid, says it undervalues

firm

(Helen Reid)

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EARLY MORNING HEADLINE ROUND-UP (0537 GMT)

The G7 fallout includes a further souring of U.S.-Canada

relations, and a promise from German Chancellor Merkel to act

against U.S. tariffs on steel and aluminium. She (Munich: SOQ.MU - news) also said

Trump's decision to pull out of the G7 communique via tweet was

"sobering and a bit depressing".

In Europe investors will be relieved that the Swiss rejected

a plan to transform the country's financial landscape by barring

commercial banks from electronically creating money when they

lend, in a landslide referendum vote.

On the corporate front Swiss chemicals firm Sika (IOB: 0QMA.IL - news) is on a

massive takeover drive, and French energy stocks could be moved

by the energy market regulator's plans to recommend higher

natural gas energy prices.

Sika targets up to $1 bln in takeovers a year to quicken

growth

U.S.-Canada dispute escalates after tense G7; Trump renews

criticism of Trudeau

Swiss voters reject campaign to radically alter banking

system

With (Other OTC: WWTH - news) sales boom in mind, Gucci tightens grip on suppliers

French energy regulator to recommend higher natural gas

prices

Merkel: EU will act against U.S. tariffs on steel, aluminium

Caixabank To Buy 51 Pct Of Servihabitat Servicios

Inmobiliarios For 176.5 Mln Euros

(Helen Reid)

*****

MORNING CALL: EUROPEAN SHARES TO SHAKE OFF G7 SHOCK (0514

GMT)

European stock benchmarks are seen opening stronger this

morning after an early wobble in Asian trading after U.S.

President Donald Trump backed out of a joint G7 communique over

the weekend.

The clear lack of a united front among the group dented

Asian shares, but they went on to recover and edge higher as

investors looked ahead to an historic U.S.-North Korea summit on

Tuesday.

Investors have also this week to get their heads around a

two-day Fed meeting starting tomorrow, and an ECB meeting on

Thursday at which policymakers could signal intentions to start

unwinding the bank's massive bond purchasing programme.

At the start of a busy week, spreadbetters call the DAX 20

points higher at 12,787, the CAC 40 down 4 points at 5,446, and

the FTSE 100 16 points higher at 7,697.

(Helen Reid)

*****

(Reporting by Danilo Masoni, Helen Reid, Kit Rees and Julien

Ponthus)