Mondi Share News (MNDI)

* European indices choppy ahead of U.S.-China trade talks
* China urges U.S. to halt pressure on Chinese companies, including Huawei
* STOXX 600 down 0.2%, DAX flat, FTSE down 0.1%
* Luxury shines after LVMH, Dior results
* Cars, miners only gainers
* UK-listed packaging companies hit by Mondi results

Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters and anchored today by Thyagaraju Adinarayan. Reach him on Messenger to share
your thoughts on market moves: rm://thyagaraju.adinarayan.thomsonreuters.com@reuters.net


LVMH ON TRACK FOR BEST YEAR SINCE 2010
LVMH shares' rally (+5.4% at the moment) puts the company on track for its best year since
2010, but investors' luxury euphoria could chill on the news that sales in Hong Kong dropped
about 25% in the quarter.
Hong Kong is an important hub for European luxury brands as shoppers across Asia typically
travel to the region to buy such products. But several months of pro-democracy protests meant
retailers, such us LVMH, are struggling.
"A slowdown in Chinese consumer spending remains the biggest risk for LVMH and peers, in our
view," Morgan Stanley said in a note.
The other surprise of the day was Christian Dior, which hit its highest since
Sept. 16 after reporting positive results for the first nine months.
LVMH and Christian Dior's strong sales in Q3 eased fears of any major fallout from protests
in Hong Kong, for now, and other luxury stocks jumped on the rivals' positive results. Kering
, Hermes and Hugo Boss all performed well.
Luxury firms also benefited from a stock market relief rally after spirits such as cognac -
LVMH produces Hennessy - were left off a list of new U.S. tariffs earlier this month. LVMH CFO
also said the company is debating whether to increase wine prices in response to U.S. tariffs.

(Joice Alves and Josephine Mason)
*****


A MINI TRADE DEAL. WILL IT MATTER? (1331 GMT)
Top negotiators from the U.S. and China are meeting for the first time since July to try to
find a way out of a 15-month trade war and markets look on the edge ahead of any development.
Expectations there could be a breakthrough in the drawn-out standoff that has dented
business confidence globally are very low but investors are speculating about the possible
impact on markets of a partial deal between the two largest economies.
It looks that such an outcome could cause a sharp move but only in the short term.
"We think a mini-deal including a delay in the October tariffs and some purchases of
agricultural goods, may cause a short squeeze in markets, but will not be enough to reverse the
declining trend in manufacturing and business investment," says Alberto Gallo, portfolio manager
at investment fund Algebris.
Similarly, Jasper Lawler, head of research at LCG, says a partial deal would be "huge" for
equities: "Even if a partial deal can be defined as something as simple as less tariffs and more
agricultural purchases, the current situation would be much less antagonistic with better
prospects of ending the trade war."
But Peter Garnry, head of equity strategy at Saxo Bank, looks more downbeat: "The tone and
direction have not been worse in our opinion between the two countries and while the narrative
is building around a narrow trade deal to backstop the most imminent pressure from the trade war
it will not matter".
"We expect U.S. equities to continue lower in the fourth quarter as the earnings season will
deliver far worse numbers than expected with an outlook in complete disarray," he adds.
Meanwhile trading on trade headlines continues. The STOXX 600 has just pared some losses off
lows followings remarks from Chinese vice premier Liu which you see in the snapshot.

(Danilo Masoni)
*****


U.S. TARIFFS ON EU: MORE TO COME? (1025 GMT)
Let's forget for a moment the Sino-U.S. commercial war and look at relations between
Washington and Brussels, another front that could heat up next month if Trump imposes car
tariffs, adding extra pressure on Europe following the WTO-approved duties.
UBS has done some math on the impact on economic growth of the WTO-backed duties on $7.5
billion worth of EU exports.
The result? The "impact appears small... equivalent to only 0.04% of EU GDP (0.06% for the
Eurozone)," it says.
More scary are the possible car tariffs and that's why UBS says it's "carefully watching"
the Nov. 13 for Trump to decide.
"A 25% tariff on EU cars could subtract around 0.2pp from Eurozone growth, with Germany
likely to face the greatest impact among the large Eurozone economies," it said.
Now we can return focusing on the China-US trade war.

(Danilo Masoni)
*****

HEADLINE PING PONG NO. 1: CHINA URGES U.S. NOT TO PUT PRESSURE (0819 GMT)
European stocks headed sharply lower after a stable start due to a U.S.-China trade
headline, the potential "bump or slump" one we were talking about earlier today.
China foreign ministry urged the U.S. to stop unreasonable pressure on Chinese companies,
including Huawei Technologies.
The headline looks like a regular tit-for-tat exchange, but the sensitivity is high as U.S.
and China are going to meet later today to try and end the 15-month trade war.
The pan European STOXX 600 index was down as much as 0.5% and has pared some of
that, down 0.2%.

(Thyagaraju Adinarayan)
*****

OPENING SNAPSHOT: LUXURY GALORE (0727 GMT)
Hopes of a potential truce in U.S.-China trade war and solid earnings from LVMH
are helping European stocks to stay positive, only just about, shrugging off worries from
another set of poor economic data from Germany.
Oh boy, LVMH's shares don't seem to be tired after running up all year (+45% YTD) and
they're adding another $10 billion to their value today. The Louis Vuitton owner's shares are
jumping 5% after its Q3 sales beat expectations despite Hong Kong unrest.
The sentiment is boosting other luxury stocks in Europe with Richemont, Swatch
, Kering and Hermes rising between 2% to 5%. Christian Dior
hit its highest since Sept. 16 after reporting results for the first nine months, also boosted
by the LVMH results.
While that's only one side of the story, Chr Hansen, Philips, Novozymes
, Mondi and Gerresheimer shares are all bleeding after their poor
updates.
Macro weakness: food ingredient maker Chr. Hansen cites macro challenges for earnings miss;
Philips cites trade war; Novozymes sees the U.S. bioethanol market downturn to continue.
Trade-senstive sectors like cars and miners are top gainers, while defensives are
underperforming suggesting that investors are in risk-on mood ahead of trade talks.





(Thyagaraju Adinarayan)
*****

ON OUR RADAR: LUXURY'S RESILIENCE, PHILIPS, MONDI, NOVOZYMES (0654 GMT)
We're probably one headline away from a big bump or a slump in Europe as investors get ready
to trade the trade as Beijing and Washington officials meet later today to try to end a bruising
15-month trade war. Futures point to a 0.2%-0.3% gain in European stocks.
Paris stock futures are outperforming after Louis Vuitton owner LVMH's solid Q3
print despite HK unrest. Upbeat results from LVMH is likely to trigger a rally as analysts were
largely expecting luxury companies to take a major hit from political protests in HK.
LVMH is seen rising 4%, while its rivals Richemont, Swatch, Kering
and Hermes are seen up 2%, according to premarket indications from traders.
Dutch health tech company Philips is seen falling 4% to 5% after it said trade
tariffs and disappointing results at its Connected Care division would make it impossible to
reach its target for profit margin improvement this year.
In other earnings-based moves, UK packaging and paper company Mondi is seen down 3%
to 5% after reporting slightly lower sales volumes; Novozymes is called -5% after
profit warning; UK's plus-sized fashion retailer N Brown seen up 5% on H1 profit beat.
Mondi flagged softening demand and this is likely to put pressure other packaging companies
such as Smurfit Kappa and DS Smith.

Some more headlines:
LafargeHolcim decides against bid for BASF unit- Bloomberg
Hargreaves Lansdown assets up 3% on new business, market gains
Boeing's 787 under pressure as Russia's Aeroflot cancels order
Top-5 BHP investor Aberdeen Standard piles on climate pressure ahead of AGM




(Thyagaraju Adinarayan)
*****

BRACE FOR SOME TRADE HEADLINE PING PONG (0621 GMT)
Stock futures indicate a slightly higher open for Europe as jittery investors brace up for
trade headlines that is likely to spark volatility. Beijing and Washington officials are meeting
later today to try to end a bruising 15-month-old trade war.
A London-based trader says be ready for some "headline ping pong".
The impact of trade war has jolted the export-heavy German economy the most and August data
showed exports fell by more than expected, reinforcing expectations that a manufacturing slump
is pushing Europe's largest economy into recession.
CAC stock futures is outperforming rest of Europe after solid Q3 results from LVMH.
News that Louis Vuitton owner LVMH's Q3 sales beat expectations despite unrest in
Hong Kong is likely to boost shares of rivals Gucci-owner Kering, Hermes,
Burberry and Swiss watchmakers Richemont and Swatch.
Analysts were expecting luxury companies to take a major hit from political protests in HK.
"We had anticipated a more marked deceleration from a very strong Q2," Jefferies says, adding
that it was an "impressive beat".
While LVMH bit the HK unrest bullet, Philips seems to be hit sharply by the trade
war as the Dutch health technology company said tariffs and disappointing results at its
Connected Care division would make it impossible to reach its target for profit margin
improvement this year.

Some headlines to digest:
German August export slump amplifies recession alarm
Suedzucker 2nd quarter earnings fall after sugar price drop
LVMH shrugs off Hong Kong pain with Vuitton sales boom
Philips to miss 2019 margin goal due to trade tariffs
Belgium's UCB to buy Ra Pharmaceuticals for $2.1 bln
Renault management shake-up on the cards - source

(Thyagaraju Adinarayan and Joice Alves)
*****

TRADE JITTERS KEEP MOOD SUBDUED (0530 GMT)
European stocks are seen opening flat to slightly lower as a mix of positive and negative
noise from Washington on U.S.-China trade negotiations keep investors on edge.
The trade-sensitive German blue-chip index rallied 1% yesterday on report that
China could agree to a partial trade deal with the U.S. despite the recent flare-up in tensions.
"A mini deal with China would be favourable, but whether it is merely a detente (no new
tariffs) or something slightly more substantial (rolling back some taxes) that's the big
question for how intense the risk revival extends," Stephen Innes, Asia Pacific market
strategist for Axitrader says.
Financial spreadbetters IG expect London's FTSE to open 11 points lower at 7,155,
Frankfurt's DAX to open 16 points lower at 12,078, and Paris' CAC to open 1 point higher at
5,500.
Luxury stocks in focus today after Louis Vuitton owner LVMH beat sales forecasts
for the third quarter despite unrest in Hong Kong. LVMH's European peers are likely to benefit
from the upbeat results.

(Thyagaraju Adinarayan and Joice Alves)
*****


(Reporting by Danilo Masoni, Joice Alves, Josephine Mason, Julien Ponthus and Thyagaraju
Adinarayan)