Glaxosmithkline Share News (GSK)

* European stocks hit lowest level in more than 1 year * Eyes on Chinese response to Trump tariffs March 23 - Welcome to the home for real-time coverage of European equity markets brought toyou by Reuters stocks reporters and anchored today by Danilo Masoni. Reach him on Messenger toshare your thoughts on market moves: danilo.masoni.thomsonreuters.com@reuters.net STICKING WITH FACEBOOK (1227 GMT) The tech giant's data fiasco has had investors, especially those with an ESG mandate,re-evaluating their holdings given the scope for tighter regulation of social media firms andquestions raised over Facebook's grip on its users' data. But Shoaib Zafar, senior analyst at SYZ Asset Management, said that they are remaininginvested in Facebook and still see its valuation as attractive. "On the positive side, with FB’s deep pockets, the company is in good shape to carry outmeaningful investments in areas where it needs to improve without hurting its operating or netincomes," says Zafar in a note, citing the likelihood that FB will be able to improve free-cashgeneration in the year following heavy investments. As per the chart below, FB's valuation is now just trading just at a very slight premium toits broader sector - is this cheap enough to tempt all investors? (Kit Rees) ***** "WINNERS AND WARNERS" - TAKEAWAYS FROM THE UK RESULTS SEASON (1212 GMT) After an earnings season thick with profit warnings and sharp stock falls, Liberum's rundownof UK results finds that large-caps have underperformed while small-caps have done well, growthhas done better than value, and domestic stocks have beaten international earners. The increase in sterling is of course part of the dynamic delivering greater strength todomestic stocks, in a turnaround from the post-Brexit vote pattern of pound weakness puffing updollar-earners. Defensive sectors have had a worse performance than cyclicals, with fewer beats than misses.Insurance, staples and pharma were all weak, Liberum strategists note. Perhaps surprisingly, housebuilders showed the strongest positive pattern this season, theysay, while support services has also been positive, followed by media and capital goods. They see the most likely "winners" as mid-cap domestic growth and small-cap domesticcyclical value stocks, while "warners" are more likely to be found among large-cap valueinternational earners, mid-cap international earners, and small-cap defensives. Those who've been arguing international dollar earners are a safe hiding place from Brexitand domestic risk could be in for a nasty surprise. (Helen Reid) ***** HOW COULD CHINA RETALIATE? (1104 GMT) Despite the rhetoric, analysts appear to agree that China for now is unlikely to respondaggressively to Donald Trump's first tariff move as the world's second largest economy is seenas having the most to lose from any escalation. China unveiled on Friday its own plans to impose tariffs on up to $3 billion of U.S.imports, a "mild" response - to use the words of Michael Every, strategist at Rabobank. But it could do more and investors in global risky assets may want to closely monitorBeijing's next steps to assess the risk of a full blown trade war hurting economic activity. TD Securities strategist Mitul Kotecha has listed possible other counter measures that Chinacould take from interventions on the bond and forex markets to geopolitical build up measures: * "Other potential retaliatory measures by China could include selling part of the country'smassive $1.18 trillion holdings of US Treasuries. That said, the safe haven bid has been morecompelling so far ... This type of retaliation seems unlikely." * "Another potential form of retaliation is to weaken the CNY, compensating for some of thepressure experienced by Chinese exporters. However, we don't think Chinese officials will optfor this approach. Any (sharp) weakening of the CNY could lead to a resumption of capitaloutflows from the country while adding pressure on Chinese corporates." * "Finally, China may also step up tensions from a geopolitical perspective by intensifyingits activities in the South China Sea, something that will provoke the ire of the USadministration (and the Asian region more broadly)." Meanwhile a Reuters exclusive has revealed that a U.S. warship is sailing near disputedislands in South China Sea, prompting China to say that provocative behaviour will only causethe Chinese military to strengthen its defence capabilities. Watch these spaces! (Danilo Masoni) ***** POSITIONING PORTFOLIOS FOR A TRADE WAR (1019 GMT) Protection against a potential trade war is the order of the day - but how are investorsputting this in place? UBS chief investment officer Mark Haefele says his asset allocationremains "pro-risk" but he advises investors consider equity put options to reduce portfoliovolatility. UBS also holds counter-cyclical positions: "an overweight in 10-year U.S. Treasuries, and anoverweight in JPYNZD, that should perform if the market starts to price in a full-scale tradewar." Defensives are also cited by several brokers as a good bet in this climate. "We have advocated that this, alongside evidence of peaking sentiment indicators, warrants arotation away from cyclical risk assets into more defensive ones, which are better insulatedagainst a deterioration in global trade," write UniCredit analysts. Their central scenario, like many others', sees retaliation likely to be contained. (Helen Reid) ***** "THE MOST UNSTABLE TRADE FRAMEWORK SEEN SINCE THE SECOND WORLD WAR" (0949 GMT) European steel shares are tumbling even though the industry has just been let off the hookfor most of Donald Trump's U.S. import tariffs (Outokumpu -7.5 pct, Tenaris-4.1 pct, ArcelorMittal -3.8 pct). The exemptions are far overshadowed by the escalating trade tensions between the Trumpgovernment and Beijing, which raise the spectre of an open trade war that would hit economicactivity around the world. "The key impact to the (European steel) sector, in our view, does not relate to anyspecifics around new tariffs (although individual commodity dislocations will likely emerge) butto the stability of the global economy, and especially China's economy," say RBC analysts. Jefferies agrees: "With tariffs clearly targeting Xi Jinping's "Made in China 2025"cherished sectors, Trump is risking a dangerous trade war, which would inevitably damage globalsteel demand." The U.S. - China trade stand-off also ratchets up the risk for the U.S. steel industry, towhich many European steelmakers have direct exposure through local production sites. RBC calls it "the most unstable trade framework seen since the Second World War" but saysChina's response is likely to be measured, which will keep a lid on the overall impact for now. (Tom Pfeiffer) ***** TRADE FEARS TAKE EUROPEAN STOCKS TO 7-MONTH LOW (0816 GMT) The STOXX 600 has hit its lowest point since the end of August last year in early trading,as it catches up with overnight losses in the U.S. and Asia. It's far from being calm on the corporate front too: Indivior is sinking 22 percentafter the U.S. court ruling against the maker of opioid addiction treatment Suboxone. The UKfirm said it intends to appeal the ruling in favour of generic competitor Alvogen. GSK is a rare gainer on the STOXX, up 4 percent after it, too, pulled out of thebidding for Pfizer's consumer health business, following in the footsteps of ReckittBenckiser earlier this week. Basic resources, tech and banks are the worst-performing sectors. (Helen Reid) ***** WHAT WE'RE WATCHING BEFORE EUROPE'S OPENING BELL (0755 GMT) European shares are set to fall close to their early March lows with the mounting trade warjitters pushing futures on main euro zone benchmarks down around 1 percent. Remaining above those levels may indicate that the level of concern is still contained. "We do not expect a full-blown trade war, but the risk of escalation may lead to bouts ofrisk aversion in financial markets," said Credit Suisse in its investment daily. Futures on the UK's FTSE index, which yesterday ended at a 15 month low, were down 0.5percent. The trade war concerns are likely to result in a broad based sell-off, leaving little roomfor single stock movers. On the corporate arena, traders said German sports wear group Adidas could find support in abetter than expected trading update from U.S. rival Nike, while shares in specialtypharmaceutical company Indivior are called down 5 to 20 percent following an adverse ruling in apatent infringement litigation case. Next shares are seen gaining after it kept profit guidance unchanged in its annualresults. A trader summarises the sentiment: "No profit warning, decent short interest, and peershave been weak". Investors will also keep an eye on Italian stocks as its new parliament convenes to vote fortheir speakers, while Spain will also be watched ahead of a possible sovereign rating upgrade byS&P after the marker closes today. Stock movers: E.ON, RWE have no merger plans - CEOs in German paper; Novartis touts U.S.filing plans for MS drug as patent losses loom; Deutsche Bank to reap $1.7 bln from assetmanagement IPO; Telecom Italia pre-empts Elliott with board resignations; Enel ordinary netprofit beats guidance (Danilo Masoni) ***** EURO ZONE STOCK FUTURES DOWN MORE THAN 1 PERCENT (0722 GMT) Futures for the German, French and Spanish stock benchmarks are pointing to losses of morethan 1 percent, although it looks like the scale of the losses will not be enough to push thembelow the lows hit during the late February sell-off. DAX futures, for example, are now down 1.3 percent. That would bring the German benchmark to11,940 points, still above its most recent low. An earlier indication from CMC Markets of a 200points opening loss would still keep the DAX above that low. Meanwhile FTSE futures are down 0.7 percent. (Danilo Masoni) ***** EUROPEAN EARLY MORNING HEADLINE ROUNDUP (0641 GMT) Here are you top early morning headlines, although trade war jitters will likely cause abroad sell-off today, leaving little space for single stock movers. E.ON, RWE have no merger plans - CEOs in German paper Novartis touts U.S. filing plans for MS drug as patent losses loom Deutsche Bank to reap $1.7 bln from asset management IPO Dutch wholesaler B&S shares priced at 14.50 euros in IPO Dutch NIBC bank shares priced at 8.75 euros in initial public offering Telecom Italia pre-empts Elliott with board resignations Credit Suisse CEO pay falls in 2017 Adidas rival Nike forecasts reversal in N. America sales decline, tops estimates Enel ordinary net profit beats guidance Swiss watchmakers make up for lost time as China sales tick higher EU leaders tell social networks to guarantee users' privacy EU plans tougher consumer laws for Facebook, Gmail (Danilo Masoni) ***** MORNING CALL: DAX SEEN LOSING 200 POINTS AT THE OPEN (0616 GMT) The sell-off seen yesterday in Europe on mounting worries that U.S. tariffs on China importscould escalate into a full-blown trade war is set to continue today with the same intensity. Trump signed a presidential memorandum on Thursday that could impose tariffs on up to $60billion of imports from China, although the measures have a 30-day consultation period. All eyes are now on the response from China, which urged the U.S. on Friday to "pull backfrom the brink", and unveiled its own plans on Friday to impose tariffs on up to $3 billion ofU.S. imports. Raboank Senior Asia-Pacific Strategist Michael Every said China's retaliation measures sofar are mild: "Is China acting dovish to try to negotiate its way out? Is it waiting to pounceat a future date on US aviation and agri exports? Or does it have far less trade leverage thanmany had assumed?" "Note that the soybean market has not reacted significantly. That points to something alsostressed in the special report: China would shoot itself in the foot by boycotting US soy, as itwould force food-price inflation through the roof," he said. Meanwhile in Asian hours, the rumblings of a global trade war shook stock and currencymarkets, sending MSCI broadest index of Asia-Pacific shares outside Japan downfell more than two percent. Here are your morning calls for Europe, courtesy of CMC Markets. FTSE100 is expected to open 67 points lower at 6,885 DAX is expected to open 200 points lower at 11,900 CAC40 is expected to open 77 points lower at 5,090 (Danilo Masoni) ***** (Reporting by Danilo Masoni)