LIVE MARKETS-Whiskey wars drive flows into Pernod Ricard

(Corrects ownership of Jack Daniel's whiskey in first item in April 9 LIVE MARKETS blog)

* STOXX 600 turns negative as risk appetite fades

* Russian sanctions sink exposed stocks

* Deutsche Bank (IOB: 0H7D.IL - news) rises after co names new CEO

* Norsk Hydro (LSE: NHY.L - news) gains as sanctions hit rival Rusal (HKSE: 0486-OL.HK - news)

LONDON, April 9 (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

WHISKEY WARS DRIVE FLOWS INTO PERNOD RICARD (1433 GMT)

Can you guess which was the most traded, and most bought, stock among Kepler Cheuvreux's large-cap orders last week?

Pernod Ricard (TLO: RI-U.TI - news) : the company behind Ballantine's, Glenlivet, Chivas Regal and Jameson whiskies.

The French firm was cited, along with other Europe-listed drinkmakers, as one of the potential plays on the tariffs slapped by China on U.S. imports - as investors looked for Chinese demand to switch from U.S. brands such as Brown-Forman's Jack Daniel's whiskey to European equivalents.

Judging by Kepler Cheuvreux's figures it was certainly a popular trade.

Elsewhere the broker's order flows showed signs Italy's relative dominance could start to wane. Spanish stocks were the strongest 'buy' with +16% of net client flows, while Italian stocks were under the most selling pressure with -15% of flows.

Sector trades also showed an interesting pattern: healthcare and industrials saw the strongest buying flows while technology stocks were the most sold, with net flows of -25%.

(Helen Reid)

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REASONS TO DITCH TECH SHARES (1414 GMT)

There's currently no shortage of reasons for becoming wary of U.S. tech stocks, considering the recent accumulation of negative news headlines for the likes of Amazon, Facebook (NasdaqGS: FB - news) or Tesla.

"The vulnerability of tech to increased regulation & taxation, most especially as economic slowdown in coming quarters wrecks government finances, means investors should reduce tech allocations in 2018," Bank of America Merrill Lynch analysts write in a strategy note listing reasons to cut U.S. tech exposure.

First (Other OTC: FSTC - news) , it's been the best performing sector of the bull market but it now has "bubbly prices" and an (oversized?) large market cap in comparison to the rest of the global economy.

U.S. tech accounts for a quarter of the U.S. stock market's EPS, a level usually associated with bubbles, and "there are currently just 5 'sells' out of 250 FAAMG recommendations," the bank notes.

There's also the fact that privacy is increasingly becoming a policy issue, and tech is relatively under-regulated compared to the rest of the economy. Previously booming sectors (tobacco, financials and biotechs) have eventually been hit by regulation.

From the government's point of view, the tech sector can also be seen as not paying its fair share of taxes, and might be forced to raise its relatively low effective tax rate.

Last but not least, U.S. tech has the highest foreign sales exposure of all U.S. sectors, making it vulnerable to rising trade barriers.

(Julien Ponthus)

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LOW VOL STOCKS AT BARGAIN-BASEMENT PRICES (1333 GMT)

Everything's been a bit topsy-turvy in the past 18 months.

It may seem strange, in these increasingly volatile times, that categories of stocks generally displaying lower volatility don't actually have a premium attached to them.

The highest peak premium (in price-to-book) paid for a low vol stock over a high vol share within a sector was 1x in July 2016, UBS (LSE: 0QNR.L - news) finds, while it now stands at zero, having fallen rapidly.

And while European stocks are down year-to-date, Italian shares are outperforming while Switzerland is lagging. Not what you would expect in a typical risk-off market...

With (Other OTC: WWTH - news) uncertainty still high, UBS says there's an opportunity to pick up some "left-behind quality" with low vol stocks the cheapest in a decade.

"If PMIs roll over further or trade war concerns escalate, even more reason to pick up quality within sectors at no extra cost," they write.

Perhaps disconcertingly, they say "The only time low vol got much cheaper over the past 20 years was during the 99/00 tech bubble."

High quality stocks that have lagged include BT, Imperial, Pennon, Roche, Reckitt Benckiser (Xetra: A0M1W6 - news) , GlaxoSmithKline (Other OTC: GLAXF - news) , Deutsche Telekom (IOB: 0MPH.IL - news) and Bayer (IOB: 0P6S.IL - news) . Unsurprisingly these are mostly healthcare, consumer staples, telecoms stocks.

Stocks in the "low quality" section that have outperformed and may be headed for a fall, include STMicro, Ocado, Faurecia (Swiss: EO.SW - news) , ACS (Amsterdam: SR6.AS - news) and Yara, UBS' equity team adds.

Graphic: https://tmsnrt.rs/2qj0C6T

(Helen Reid)

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REASONS TO STAY CONFIDENT (1257 GMT)

Whether concerns over trade wars ease or escalate, sentiment remains fragile. Today's early gains in Europe have already fizzled out and Wall Street futures are now pointing south.

Despite that Lilian Chovin, multi-asset strategist at Coutts, prefers focusing on the fundamentals, pointing to four reasons as to why investors should remain confident.

1) Companies are making money

2) There is good value out there for selective investors

3) Economic fundamentals are still strong

4) Investing beats inflation

"We continue to be guided by long-term economic fundamentals rather than day-to-day headlines, and those fundamentals tell a good story," he says.

(Danilo Masoni)

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DIALLING BACK EQUITY EXPOSURE (1219 GMT)

Analysts at BNP Paribas Asset Management have reduced their exposure to equities given the rise in risk associated with protectionism.

But they add that reducing their exposure to Euro zone and Japanese equities reflects profit and loss management rather than a change in macroeconomic view.

"The spike in risk associated with protectionism has hit eurozone equities along with other markets," say BNPP AM analysts in a note.

"The correction meant that our positions reached technical levels that exposed them to the risk of a further sell-off and took them close to our stop losses."

BNPP AM's analysts also acknowledge the weaker-than-expected data in the Euro zone over March, but say that it is "too soon to worry about a turn in the cycle in Europe," given that the region is still seeing a robust expansion.

(Kit Rees)

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EARNINGS TO PROVIDE SILVER LINING FOR STOCKS (1145 GMT)

Although we've come down somewhat from the open, markets are largely holding on to gains today and it's worth looking at some of the catalysts brokers are pointing to for a more sustained recovery, chief among which is the U.S. earnings season.

"Equities are looking oversold just as a very strong reporting season is beginning," write JP Morgan strategists. "Global earnings delivery plus U.S. buybacks could catalyze recovery."

Q2 will thus be a turning point for high equity prices and tighter spreads, they reckon. Positioning is also quite pessimistic, with many institutional metrics - like equity hedge fund/CTA/risk parity betas - about 50 percent below average.

Another reason for equities to find support is higher dividends, a big contributor to equity performance. "We expect the dividends uptrend to continue," JPM says.

In this adverse trade environment JPM does advise some trades as a hedge:

- caution on the tech sector with its "elaborate supply chains"

- preferring periphery over core, as Germany is highly exposed to China

- domestics over exporters

- financials over cyclicals, as cyclicals are more sensitive to global trade

(Helen Reid)

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MIDDAY UPDATE: AT DAY'S LOWS (1117 GMT)

There is not much conviction around and following today's broadly positive open main European benchmarks have touched fresh day lows with the UK's FTSE dipping into the red, down 0.14 percent, dragged lower by miners and Russian-exposed stocks.

While the STOXX 600 was last up 0.17 percent, in the U.S. futures have slightly reduced their gains but remain up around 0.6 percent.

Looking ahead, JCI Capital portfolio manager Alessandro Balsotti says the focus will remain on the Sino (Dusseldorf: 1205802.DU - news) -American tensions with a speech from China's President Xi Jinping at the Boao Forum likely to be closely watched for any sign of de-escalation. Otherwise, he says the U.S. CPI data, the FOMC minutes and a Draghi speech will be in the spotlight on Wednesday while Thursday will see the minutes of the latest ECB meeting.

(Danilo Masoni)

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A ROUGH PATCH FOR THE "GLOBAL SYNCHRONISED GROWTH" NARRATIVE (1025 GMT)

The Sentix index for the euro zone fell more than expected in April with concerns about a slowdown in global growth being blamed for the fall, which constitutes a worrying sign for the "global synchronised growth" narrative backed by the bulls.

"Even (Taiwan OTC: 6436.TWO - news) though the current situation is still rated as excellent ... the prospects for the future have become massively gloomier," said Patrick Hussy, managing director at Sentix, noting that "the German economy is facing powerful headwinds".

Talking of which, data published this morning showed German exports plunged unexpectedly in February, posting their biggest monthly drop in 2-1/2 years in a further sign that growth in Europe's biggest economy could have reached its peak.

The #Euroboom theme already took a hit last week with Citi's economic surprise index for the bloc at a 2013 low, revised down PMIs and weak German industrial orders.

HSBC also released its "Chinometer" indicator this morning, which shows market sentiment momentum fading for the country.

"The jury remains out on whether this is a pause before a fall in sentiment of China, but the good news is that the level does not look extreme relative to history", HSBC analysts wrote while the trade dispute with the United States considerably clouds the outlook.

(Julien Ponthus)

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VIEWS FROM THE STREET: RUSSIAN SANCTIONS (0945 GMT)

Sanctions on Viktor Vekselberg, owner of holding group Renova, have hit some of Renova's top holdings Sulzer (IOB: 0QQ9.IL - news) , Schmolz & Bickenbach (IOB: 0QPH.IL - news) and Oerlikon (see graphic below). Oleg Deripaska's naming on the list has sunk Rusal and En+ shares. But the impact is being felt widely beyond the corporates directly impacted.

"The U.S. list may not be the final list and it feels like there will be more sanctions, so investors do not know which, if any, stocks to hold," says John Meyer, mining analyst at SP Angel. "U.S. investors have to sell their interests in Rusal and En+ among others by May 7."

Evraz (LSE: EVR.L - news) , majority owned by Roman Abramovich (also Chelsea FC owner), is sinking 14 percent despite Abramovich not being named on this sanctions list. Meyer points to blanket selling as the likely trigger.

"Everything gets sold off in this environment," he says.

"Cautious funds might be tempted to sell all Russian stocks but funds which are mandated to hold a proportion of Russian stocks, if there are any, will, ironically, need to raise weightings in non-sanctioned companies."

Marc Ostwald, analyst at ADM ISI, says the Russia oligarch and corporate sanctions have a "far more profound impact than the U.S./ China tensions, far more than 2014 measures, and drawing a lot of companies into the net".

Read the full list of sanctions-hit businessmen and companies here: https://reut.rs/2qhKUsM

Graphic: https://tmsnrt.rs/2IDAdsa

(Helen Reid)

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RUSSIA-EXPOSED STOCKS SINK AFTER NEW U.S. SANCTIONS (0840 GMT)

While concerns over trade wars ease, new sanctions imposed by the U.S. on Russian businessmen are weighing on a number of stocks which have Russian ownership.

This has already played out in the aluminium price, which has rallied on the back of sanctions the U.S. placed on aluminium giant Rusal, whose Moscow-listed shares fell 17 percent and Hong Kong listed shares fell 48 percent.

On the FTSE 100, steel miner Evraz is the biggest faller, down 8 percent with a trader saying this is likely to be on readacross from the sanctions.

And Glencore is down 2.6 percent. The miner said back in October that it was going to swap its stake in Rusal for shares in EN+ Group, which was also targeted by sanctions and is down around 22 percent (39 percent since Friday's open). Polymetal is also falling 3.2 percent.

Elsewhere shares in Swiss pump maker Sulzer and Swiss technology group Oerlikon were sharply down, falling 8.5 percent and 5.4 percent respectively after their majority holder Viktor Vekselberg appeared on a list of U.S.-sanctioned individuals.

(Kit Rees and Julien Ponthus)

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OPENING SNAPSHOT: EUROPEAN STOCKS BOUNCE (0718 GMT)

It's a firmer start for European shares this morning, with banks the standout performers thanks to a rise in Deutsche Bank's shares after the lender appointed a new CEO.

Elsewhere M&A is in a focus with shares in EDP the biggest gainers, up nearly 6 percent, after BFM Business reported that Engie (LSE: 0LD0.L - news) was examining a bid for the Portuguese utility.

Europe's STOXX 600 is up 0.3 percent, while Germany's DAX is up 0.6 percent in early trading.

(Kit Rees)

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BRACE YOURSELVES FOR MORE TRADE WAR MOOD SWINGS (0646 GMT)

Financial markets seem to have embarked on a sentiment rollercoaster over the possibility that the U.S. and China actually embark on a trade war which could hurt the world economy.

Analysts are pointing out two concerns with this ride: one doesn't know how it ends and how long it will last.

"The chatter over the weekend appeared to suggest some optimism that some form of deal would likely be the probable outcome, though how long that could take to pan out remains a significant unknown, and as such further volatility seems likely", said CMC Markets (LSE: CMCX.L - news) ' Michael Hewson.

Rabobank also compared the standoff between the two countries as a soap opera which is promising to keep viewers entertained.

Analysts have warned the drama would be a long-running one given that the lengthy public discussion period on U.S. tariff proposals means the earliest they might be imposed is somewhere around late July or early August.

"This is not going to happen tomorrow, and given the mercurial nature of the U.S. administration, the whole issue could well disappear before anything really happens," said Marshall Gittler, chief strategist at ACLS Global.

"Many market participants may be starting to think that this is just a lot of sound and fury, signifying nothing in the end. But ... you never know, U.S. trade policy is in the hands of someone totally unpredictable."

(Julien Ponthus)

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WHAT'S ON THE RADAR AHEAD OF THE EUROPEAN OPEN (0638 GMT)

European bourses are expected to rise at the open with optimism regarding the possibility of averting a full blown trade war between the U.S. and China spreading across markets.

European futures are going in the same direction as their U.S. peers and the fact that U.S. shares are still above their 200 day MA is also seen as supporting the markets. There is also hope that the American earnings season which will kick off later this week will also support the bulls with solid fundamentals.

In the meantime there is no shortage of corporate news in Europe to fuel possible market moves, notably a new CEO for Deutsche Bank and a new twist in Vivendi’s Italian campaign with proxy advisers backing Elliott.

M&A is still very active with Novartis’ plans to buy AveXis (NasdaqGS: AVXS - news) in a $8.7 billion cash deal, Rolls-Royce selling its German-based diesel parts maker L'Orange (LSE: 0OQV.L - news) for 700 million euros and Tata Steel considering taking a majority stake in its planned European steel joint venture with Thyssenkrupp (IOB: 0O1C.IL - news) .

In a possible blow to the high street, Adidas (IOB: 0OLD.IL - news) said it expects to close down stores in the coming years as part of a shift towards selling more goods online.

Here's a round-up of the top European company headlines:

Novartis (IOB: 0QLR.IL - news) pays big premium to get hands on AveXis in $8.7 bln deal

Deutsche Bank's new CEO sees "tough decisions" ahead [nL8N1RM0HO

FOCUS-Tata Steel (BSE: TATASTEEL.BO - news) open to taking majority stake in Thyssenkrupp tie-up -sources

Adidas to close stores in online push - CEO in Financial Times

Proxy adviser Glass Lewis tells Telecom Italia (Amsterdam: TI6.AS - news) investors to back Elliott's proposals

Rolls-Royce sells parts maker L'Orange to Woodward (NasdaqGS: WWD - news) for 700 mln euros

German exports post biggest drop since 2015

(Julien Ponthus and Kit Rees)

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TRADE WAR OPTIMISM SPREADS TO EUROPE, FUTURES SUGGEST (0610 GMT)

European futures are broadly trading in positive territory, suggesting that the current optimistic mood regarding the trade standoff between the U.S. and China is indeed spreading from Asia to Europe.

Futures for the Euro Stoxx 50 were up 0.4 percent, while DAX futures rose 0.8 percent. Futures for France's CAC gained 0.2 percent, and FTSE futures advanced 0.5 percent. (Julien Ponthus)

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EUROPEAN SHARES SEEN RISING AS TRADE WAR OPTIMISM PICKS UP (0520 GMT)

European bourses are expected to rise at the open with optimism regarding the possibility of averting a full blown trade war between the U.S. and China spreading across markets.

Asian shares rose and U.S. futures are in positive territory as U.S. President Donald Trump predicted on Sunday that China would eventually take down trade barriers, signalling, some analysts believe, that a solution could be found to defuse tensions between the world's two largest economies. Financial spreadbetters expect London's FTSE to open 25 points higher, Frankfurt's DAX up 39 points and Paris' CAC up 6 points.

(Julien Ponthus)

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