* STOXX 600 hits highest since Dec 4
* European stocks pare gains 90 mins into trading
* Fed says will be 'patient' on future rate hikes
* Asia stocks climb to 4-mth high
* Shell boosts oil & gas sector to 2-month high
Jan 31 - Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Danilo Masoni. Reach him on Messenger to share your thoughts on market moves: danilo.masoni.thomsonreuters.com@reuters.net
EUROPEAN STOCKS CURB THEIR ENTHUSIASM AS ECONOMIC CONCERNS LINGER (0956 GMT)
Although the headline news that the Fed is stalling rate hikes, heeding the market's signals, was taken very positively, the fact euro zone stocks have already erased all their early gains and the STOXX is close to doing so indicates investors are looking more closely at the reasons why the Fed is taking a breather: and they're not good news.
The central bank removed its assessment that risks to the economic outlook are "roughly balanced", and slightly downgraded its assessment of economic activity to rising at a "solid" rate from a "strong" rate.
With trade tensions also still bubbling, there is no shortage of risks to equity investors.
Maya Bhandari, portfolio manager of multi-asset at Columbia Threadneedle, has written a note considering those other risks. Here are her main calls on the trade war, recession fears, and Brexit:
* a likely de-escalation of the trade war: "by all counts a zero-sum game"
* as a result, Asian and Japanese stocks in particular are likely to re-rate
* asset markets appear to be pricing in around a 50 percent chance of recession over the next year
* because of that bearish outlook, Bhandari reckons recession hedges "appear to be somewhat overvalued"
* Columbia Threadneedle expects slower but above-trend economic growth in most regions, supporting mid-single-digit earnings growth
* on Brexit, the asset manager sees a 60 percent chance of an orderly exit, 20 percent chance of an extension of Article 50, and 20 percent chance of a no-deal
* multi-asset portfolios have continued to build sterling exposure across sterling-based funds to "further desensitise client portfolios to Brexit-induced swings in value"
Despite all this, the MSCI AC World stock index is still set for its best January ever - and its strongest month since Oct 2015:
(Helen Reid)
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FED PATIENCE IS MUSIC TO MARKET'S EARS (0826 GMT)
The Fed's strong signal of stalling rate hikes has sent European markets rallying strongly this morning, following yesterday's gains on Wall Street. The STOXX is up 0.5 percent at its highest since Dec 4, and the DAX is up 1.1 percent.
As one trader notes, the watch-word from Jerome Powell yesterday was patience: "Jay Powell used the word 'patient' seven times in the press conference."
It's a pause investors are cheering and using as an opportunity to buy back into stocks.
Otherwise, it's earnings galore this morning with heavyweight FTSE 100 companies Shell, Diageo, and Unilever reporting alongside disappointments from Switzerland's Swatch (down 7.6 percent) and Germany's Software (down 9.3 percent).
The oil and gas sector is up 1.8 percent to its highest since Dec 5 - nearly two months - thanks to strong results from oil major Shell.
Unilever, on the other hand, is down 3 percent after its Q4 sales missed expectations due to inflation in Argentina and flat volume growth in developed markets.
Here are today's top movers:
(Helen Reid)
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WHAT WE'RE WATCHING: EARNINGS ALSO FROM UNILEVER, BT, SHELL (0752 GMT)
European shares are expected to open higher today after a dovish policy decision by the Federal Reserve sent Wall Street rallying and Asian equities to a 4-month high.
Futures on main European benchmarks are up 0.3-0.6 percent, setting the pan-European STOXX 600 index to open at its highest in nearly 2 months.
The gloomy macro backdrop that made the Fed more patient could help support the shares in companies that pay stable dividends and are less exposed to the economic cycle such as utilities and telecoms, while banks and cyclicals could face more headwinds.
On the corporate front, there are plenty of corporate results to digest.
Nokia will be on the in focus after the telecom network equipment maker posted stronger-than-expected quarterly results but traders called the stock to fall 2-7 percent at the open saying its network guidance disappointed.
BT Group was seen rising 3-5 after it reiterated its outlook, while Unilever was expected to fall around 2 percent after it reported lower-than-expected fourth-quarter sales, hurt by flat volume growth in developed markets. Swatch posted lower-than-expected results, hit by a downturn in Asia and weak sales in France, sending its shares down 4-5 percent in premarket. Shell is seen rising after Q4 profit beat expectations.
Other stock movers: H&M sticks to dividend despite surprise Q4 profit fall; Diageo's half-year sales rise on India, China demand; announces share buyback; Berry Global considers possible cash offer for Apollo target RPC
For more headlines check out the previous post.
(Danilo Masoni)
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HEADLINES ROUNDUP: NOKIA CONFIDENT, SWATCH DISAPPOINTS, BID WAR FOR OSLO BORS (0641 GMT)
Turning to the corporate front the session is likely to be livened up by some more earning updates and one to watch this morning will be Nokia after the telecom network equipment maker forecast stronger-than-expected 2019 results. News like this --> EU considers proposals to exclude Chinese firms from 5G networks may also help.
On a downbeat note is Swatch, whose results missed expectations amid a downturn in Asia and weak sales in France, while in M&A there's an nice development for Oslo Bors investors after Nasdaq made a bid for the Norwegian stock market operator, setting up a takeover battle with Euronext.
Here's your headlines roundup:
Nokia sees strong 2019 profit
Swatch Group FY results disappoint, slowdown in Q4
Nasdaq bids $771 mln for Oslo Bors in Euronext challenge
Roche says operating profit rises, helped by Ocrevus
Essity Q4 core profit tops forecast
WPP to sell its 49 pct stake in consulting firm Richard Attias
Deutsche Bahn discusses selling assets to boost finances - sources
Italy's Nexi set to sign up banks for IPO this week - sources
Italy's Popolare Bari says to beef up capital ratios in H1
Anglo-American lays off 180 workers at Chile copper mine
Flybe dismisses top investor call for chairman removal, sale inquiry
(Danilo Masoni)
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PATIENT FED TO SEND EUROPEAN SHARES HIGHER (0622 GMT)
Indications from spreadbetters point to a stronger start on European stock markets today after the Federal Reserve kept interest rates steady, signalling a possible end to its drive to tighten monetary policy amid signs of slowing global growth.
The U.S. central bank discarded its promises of "further gradual increases" and said it would be "patient" before making any further moves.
"Only a few months ago, the Fed was extremely confident and expected to hike three times in 2019 and a final time in 2020. Today, the Fed adopted a wait-and-see approach and carefully removed references to further rate hikes," says Rabobank strategist Philip Marey.
"All’n all, both the FOMC statement and Powell’s press conference confirm our view that the Fed’s pause is in reality the end of the hiking cycle. We expect the Fed’s target range for the federal funds rate to remain unchanged for the remainder of the year, followed by rate cuts in 2020 as the economy starts to slide into a recession," he adds.
Financial spreadbetters at IG expect London's FTSE to open 14 points higher at 6,956, Frankfurt's DAX to open 54 points higher at 11,236 and Paris' CAC to open 24 points higher at 4,998.
In Asia, stocks rose to a four-month high following the Fed's policy decision.
(Danilo Masoni)
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