LIVE MARKETS-Volatility delivered stellar February for European exchanges

* European shares strongly higher

* Focus back to earnings, M&A deals

* Smurfit Kappa (Frankfurt: SK3.F - news) soars after unsolicited bid

* Worries over trade wars, Italy risk ease

LONDON, March 6 (Reuters) - Welcome to the home for real-time coverage of European equity

markets brought to you by Reuters stocks reporters and anchored today by Kit Rees. Reach her on

Messenger to share your thoughts on market moves: rm://kit.rees.thomsonreuters.com@reuters.net

VOLATILITY DELIVERED STELLAR FEBRUARY FOR EUROPEAN EXCHANGES (1248 GMT)

February was one of the best months in years for European exchanges, UBS (LSE: 0QNR.L - news) analyst Michael

Werner notes, thanks to a surge in volatility amid mounting concerns around bond markets and

potential trade wars.

Cash equity volumes surged and exchanges saw strong market share improvements versus

alternative trading venues. There was double-digit growth in ETF volumes as well, both in the

U.S. (+45%) and in Europe (+23%), and derivatives volumes increased at Euronext (Euronext: ENX.LS - news) and Deutsche

Boerse.

Dark pool caps, an element of the new MiFID II regime which regulator ESMA delayed, are set

to come into force on March 12 after the details are released tomorrow.

Werner expects dark trading volumes to decline by around 350 basis points as a result of the

caps, likely boosting volumes on exchanges even further.

"Of this 350bp of market share, we expect the regulated exchanges to capture more than 70%,

with the remainder going to the lit MTFs," he adds, saying these shifts will occur in the coming

months.

Below you can see February saw the biggest turnover across European trading venues in five

years, with over 2.5 trillion euros traded:

(Helen Reid)

*****

GOING FOR A DIP (1225 GMT)

It looks like BNP Paribas Asset Management was one of those who bought the dip last month,

adding to their equity longs in Europe.

They also mention they decided to hedge part of their European exposure due to the risks

around the Italian elections and German coalition vote.

"We have used the correction to increase tactically our position in European equities. This

has enabled us to make the most of the market rebound," strategists at BNPPAM say in a note.

"The base case scenario for our macroeconomic roadmap remains ‘Goldilocks’ – healthy growth

and subdued inflation. There is not enough evidence to challenge our assessment at this stage,"

they add.

Here's a chart showing how global asset classes have done since the February sell-off - as

you can see, most of them have recovered somewhat!

(Kit Rees)

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BACK TO (ATTRACTIVE) VALUATIONS! (1155 GMT)

Trade war rhetoric, inflation scare, volatility jitters and political risk have combined

over the past few weeks to provide markets with good reasons for what some see as a healthy

pull-back. No surprise then that on a positive day for global stocks when all these worries look

to have dissipated, investors are back to looking for the best bargains.

Among them is John Ricciardi, CEO at Kestrel Investment Partners, who makes a case for euro

zone stocks, citing their "attractive" valuations and the favourable macro backdrop.

"Valuations for European shares are attractive given the positive prospects over the next

several months for faster EMU consumption growth, accelerating continental production with

inflation rates close to ECB targets and a widening recovery in European investment growth," he

says. "The implications are for higher EMU corporate earnings based on broad real output

expansions across the zone giving support to European share prices".

According to Kestrel calculations, European shares' price/earnings ratio is at a 5-year low.

(Danilo Masoni)

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NOT JUST AUTOS: MS POINTS TO TARIFF RISKS FOR EUROPEAN INDUSTRIALS (1133 GMT)

While German carmakers have been the main sector in the spotlight as potentially heavily

penalised by U.S. tariffs, Morgan Stanley (Xetra: 885836 - news) analysts point to capital goods stocks and aerospace

as other sensitive areas.

"We see most obvious risks for increasing raw materials costs if using imported steel or

aluminium at companies like Assa Abloy (LSE: 0R87.L - news) , Dometic, Electrolux, Kone (LSE: 0II2.L - news) , Sandvik (LSE: 0HC0.L - news) ,

Schindler, SKF (LSE: 0NWW.L - news) and Vestas," write MS analysts.

As you can see below, appliances stocks depend the most on U.S. imports.

If the U.S. does slap tariffs on raw materials, it could be bad news for the aerospace

sector as well. Aluminium constitutes 75 to 80% of the value of a naked airframe, MS writes.

But tariffs on finished products are less likely in aerospace, they reckon.

According to their calculations, the potential gain to the U.S. exchequer from equalising

tariffs in the aerospace industry would be less than $1 billion per year, compared to $12 to $13

billion from similar protectionist measures on Autos.

Among the German carmakers, they reckon BMW (EUREX: BMWE.EX - news) is the most exposed, with up to 20

percent of its global sales in the U.S., while Daimler (IOB: 0NXX.IL - news) and VW are also

under potential threat. PSA and Renault (LSE: 0NQF.L - news) , meanwhile, sell no cars in the U.S.

directly at the moment.

(Helen Reid)

*****

UNSOLICITED BID FOR SMURFIT KAPPA PUTS PACKAGING SECTOR ON FIRE (1052 GMT)

As Jefferies mentioned earlier, there is definitely a "positive M&A read" on the packaging

sector after Smurfit Kappa dismissed an unsolicited bid from U.S.-based International

Paper.

Here's what the shares in the top players in the industry look like this morning as Smurfit

Kappa surges 18 percent:

(Julien Ponthus)

*****

FEBRUARY WAS ALL ABOUT RATES (1028 GMT)

February was the month when interest rates and inflation took centre stage and it seems

investors who ignored this new theme paid for it dearly.

According to MSCI (Frankfurt: 3HM.F - news) 's research for February, high dividend yield strategies sustained the

worst performance, while "momentum" limited losses:

The same lesson can be drawn from the performance of sectors associated with bond proxies,

like consumer staples, or those which are very sensitive to a rise in interest rates like real

estate:

(Julien Ponthus)

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WORST DAY EVER FOR JUST EAT AS INVESTMENT SPENDING BITES (0951 GMT)

Shares (Berlin: DI6.BE - news) in Just Eat (Frankfurt: A1100K - news) are down 10.2 percent, the worst performers on the STOXX

after the takeaway delivery company said it would invest an extra 50 million pounds in 2018 to

stay ahead of the competition, which includes Deliveroo and Uber Eats.

"The new CEO delivered a severe blow to earnings momentum for this market darling," notes

Northern Trust Capital Markets analyst Ameet Patel, pointing to earnings guidance nearly 25

percent below consensus.

It's unexpectedly bad news for a stock which has captured the imagination of many investors

looking for online alternatives to the UK's bricks and mortar retailers.

"CEO Peter Plumb's maiden results presentation will be under real scrutiny now as bulls

(basically all of the sell-side) will no doubt be searching for positives," says Patel.

Hargreaves Lansdown (Frankfurt: DMB.F - news) analyst Laith Khalaf says the big move in the shares is down to "shock

and concern that the move may in fact represent an admission that competition is intensifying

for Just Eat." Pressure will be on Plumb to argue returns on this investment will be strong

enough to justify derailing near-term earnings growth, he adds.

Interestingly Liberum added Just Eat to its 'top ten buys' list just this morning. Strategy

analysts there argue the threat from competition is overdone as Just Eat is "the leader in all

of the countries it operates in".

It's Just Eat's worst day since it listed in 2014.

(Kit Rees and Helen Reid)

*****

OPENING SNAPSHOT: EUROPE BACK IN "RISK-ON" MOOD (0815 GMT)

European shares are clearly in a "risk-on" mood this morning at the open as markets around

the world appear to shrug off trade war fears and political risk in Italy, with Milan's FTSE MIB

up more than 1 percent despite the weekend's inconclusive general election.

Some M&A to spice things up too with Smurfit Kappa up 18 percent after rejecting an

unsolicited bid from International Paper.

(Julien Ponthus)

*****

MORNING HEADLINE ROUND-UP (0740 GMT)

Smurfit Kappa rejects unsolicited International Paper approach

William Hill (Frankfurt: 633847 - news) to sell Australia business to CrownBet unit

Airbus sets services goal, targets productivity gains

Fiat Chrysler to spin-off Magneti Marelli without raising money - sources

France's Thales (LSE: 0IW5.L - news) says expects to exceed medium-term targets

Activist Elliott building fresh stake in Telecom Italia (Amsterdam: TI6.AS - news)

VW ponders trucks IPO amid broader efficiency push -CEO

Covestro (IOB: 0RBE.IL - news) to replace ProSiebenSat.1 on Germany's DAX index

Vonovia (Milan: VNA.MI - news) sticks with 2018 guidance after FY profit rise

Lindt expects U.S. business to weigh on sales growth this year

Lighting group Zumtobel Q3 loss higher than expected

France's Eurofins raises 2018 target after strong 2017 results

Melrose (LSE: 136541.L - news) should seek pensions regulator approval for GKN (Frankfurt: 694194 - news) takeover-lawmakers

BUZZ-Global miner BHP rises on report Mexico's Pemex seeks JV partners

Evonik to sell methacrylates plastics business

UK shoppers keep on spending more on food as inflation bites-BRC (Shanghai: 600466.SS - news)

Saipem (LSE: 0NWY.L - news) sees tough year ahead after 2017 guidance miss

Ashtead sees FY results in line on North America strength

France's Orange (LSE: 0OQV.L - news) threatens to cut Tf1 (Paris: FR0000054900 - news) 's signal - Le Figaro

Qualcomm (Swiss: QCOM-USD.SW - news) takeover battle intervention shows U.S. security panel's expanding reach

Total (LSE: 524773.L - news) acquisition of Maersk Oil to close this week -CEO

(Tom Pfeiffer)

*****

REMEMBER FEBRUARY 6? EURONEXT DOES! (0726 GMT)

Feb. 6 was the worst (-2.4 percent) day for the STOXX 600 since the Brexit referendum of

June 2016. Fears concerning inflation in the United States were then dragging global equity

markets into a correction.

It was also quite a good day for Euronext: "On 6 February 2018, Euronext daily volume

reached a new record for the year, at €16,848 million, representing the 11th most active day

since 2010", the bourse operator wrote this morning.

Overall on the month, volumes increased significantly: "the average daily transaction value

on the Euronext cash order book stood at €9,141 million, up +29.4% compared to February 2017 and

up +17.6% from the previous month".

(Julien Ponthus)

*****

EUROPEAN STOCKS FUTURES BOUNCE (0708 GMT)

It is, indeed, looking like it's going to be another positive session in Europe, with the

STOXX 600 set to pull further away from the six-month low hit in the previous session.

Here's your futures snapshot:

(Kit Rees)

*****

EARNINGS: WHO'S REPORTING WHAT (0653 GMT)

It's not looking like the busiest earnings day, but updates to watch will be Telecom

Italia's fourth quarter results and a full year update from online luxury retailer Yoox

Net (LSE: 0LN0.L - news) -a-Porter. It's a quiet day on the macro front too.

Here are all the European companies set to report results today:

TLIT.MI Q4 2017 Telecom Italia SpA Earnings Release

OERL.S Full Year 2017 OC Oerlikon Corporation Ag Pfaeffikon Earnings Release

FORN.S Full Year 2017 Forbo Holding AG Earnings Release

DOKA.S Half Year 2018 Dormakaba Holding AG Earnings Release

IFA1V.HE Q4 2017 Innofactor Plc Earnings Release

BUCN.S Full Year 2017 Bucher Industries AG Earnings Release

YNAP.MI Full Year 2017 Yoox Net-A-Porter Group SpA Earnings Release

DANI.MI Half Year 2018 Danieli & C Officine Meccaniche SpA Earnings Release

VNAn.DE Full Year 2017 Vonovia SE Earnings Release

ESCH.L Full Year 2017 Escher Group Holdings PLC Earnings Release

APAX.L Full Year 2017 Apax Global Alpha Ltd Earnings Release

IWG (LSE: IWG.L - news) .L Full Year 2017 IWG Plc Earnings Release

DNORD.CO Q4 2017 Dampskibsselskabet Norden A/S Earnings Release

EUFI.PA Full Year 2017 Eurofins Scientific SE Earnings Release

AHT.L Q3 2018 Ashtead Group PLC Earnings Release

AGGK.L Full Year 2017 Aggreko PLC Earnings Release

BOY.L Full Year 2017 Bodycote PLC Earnings Release

ROR.L Full Year 2017 Rotork PLC Earnings Release

HWG.L Full Year 2017 Harworth Group PLC Earnings Release

SDL (LSE: SDL.L - news) .L Full Year 2017 SDL PLC Earnings Release

TCFP.PA Full Year 2017 Thales SA Earnings Release

SPMI.MI Full Year 2017 Saipem SpA Earnings Release

LISN.S Full Year 2017 Chocoladefabriken Lindt & Spruengli AG Earnings Release

EVKn.DE Full Year 2017 Evonik Industries AG Earnings Release

ONTEX.BR Full Year 2017 Ontex Group NV Earnings Release

(Kit Rees)

*****

MORNING CALL: EUROPEAN SHARES SEEN RISING (0632 GMT)

Good morning! Financial spreadbetters see European stocks rising at the open, shrugging off

uncertainty sparked by Italy's inconclusive election and as concerns over possible trade wars

ease.

Spreadbetters expect Britain's FTSE to gain 34 points, Germany's DAX to rise 91 points and

France's CAC to advance 28 points.

Asian stocks gained overnight, as U.S. President Donald Trump faces growing pressure from

political and diplomatic allies as well as U.S. companies over his plan to impose steel and

aluminium tariffs. Wall St closed higher.

(Kit Rees)

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