Smiths Group Share News (SMIN)

* European shares fall slightly, STOXX 600 down 0.2%
* STOXX 600 fell 0.7% from 6-week high on Monday
* Oil slightly lower after massive jump on Saudi attacks on Monday

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: rm://danilo.masoni.thomsonreuters.com@reuters.net

UK INDUSTRIALS RIPE FOR M&A (0958 GMT)
With sterling slowly recovering from multi-year lows, it could likely be one of the last
opportunities for foreign buyers to snap up some UK companies at cheap prices and Berenberg
believes the industrials sector is probably the next one to see a wave of M&A activity.
Within industrials, Berenberg says automotive, distribution and paper, plastic and packaging
are the most likely ones to consolidate.
The brokerage points to heightened private equity action in the space with latest deals of
Cobham, Howden Group and BBA Aviation's Ontic business.
"Several large European PE funds have launched in the past 18 months, dry powder levels
(cash reserves) are currently high and sterling remains weak, so we believe further activity is
likely."
Among targets Berenberg notes there have been rumours circulating about Spectris and
Smiths Group recently, but believes it sees high M&A opportunities in companies that
are a part of niche industry and have high market share, naming RHI Magnesita, Coats
and Vitec as some of them.
"These characteristics have obvious attractions but it is also worth noting that UK
industrials are: 1) in much better shape than a decade ago; and 2) less exposed to direct Brexit
risk given their global manufacturing and sourcing footprints, and with most sales earned
overseas," Berenberg analysts write in a note.

UK industrial companies forward P/E:


(Thyagaraju Adinarayan)
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WEIGHING OIL (0815 GMT)
Black gold has been the talk of the town this week and its 15% jump yesterday after attack
on Saudi Arabia crude facilities has had positive impact on oil & gas stocks and slightly
negative on the others.
As an oil importer, Europe's GDP could take a half-a-percentage-point hit on a 10%
supply-driven oil price increase, Goldman Sachs analysts say, adding that the impact globally is
around half of this.
While some may argue that a surge in oil & gas stocks could offset any impact from slowing
economic growth, GS says it has typically been an offset but this time it's different given the
sector's weight has halved from 10% of STOXX 600 to just 5%.
Yesterday, oil & gas stocks rose about 3%, while Brent crude surged 15% after the Saudi
attacks cut the Kingdom's production in half.
"It tends to be positive early in the cycle, when positive growth shocks typically drive up
equities and commodities together (2009-10), and to turn negative or closer to zero towards the
end of the cycle, when the capacity of the economy is more constrained and rising commodity
prices are more likely to reflect constraints on growth," GS says.
Goldman, which is "overweight" on oil & gas stocks, says there is no evidence that the
sector has become "less sensitive" to changes in oil prices, but highlights that the proportion
of oil stocks in European indices has fallen.



(Thyagaraju Adinarayan)
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STOXX FLAT, BANKS DOWN, OIL STOCKS RISE (0732 GMT)
European shares have opened flat to lower as the focus turns from the attacks to
the Saudi facilities that sparked a broad risk-off move at the start of this week to the Federal
Reserve which is widely expected to cut interest rates when its two-day meeting ends tomorrow.
The Fed rate cut would follow easing policy measures taken by the ECB last week and that's
going to eat further into margins of rate sensitive banks, which are among leading sectoral
losers at the start of trade in Europe, falling by 1%.
Oil stocks instead are rising for a second day, up 1%. Crude prices are pulling back
slightly but remain near May 2019 highs with a threat of a military response to the Saudi
attacks hanging over the market.
Here's your opening snapshot:

Among single stock movers, Zalando is sliding 10% to the bottom of the STOXX after
top shareholder Kinnevik placed a stake in Germany-based online fashion retailer at a discount
to market prices, while Husqvarna is down 6% after the Garden equipment maker set new
financial goals starting from 2020.

(Danilo Masoni)
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WHAT'S ON OUR RADAR AT THE OPEN (0658 GMT)
European shares are expected to open lower on Tuesday but futures point to easing selling
pressure as oil prices pull back from a massive spike even though they remain elevated in what
could pressure falling corporate earnings even further.
Future on the Euro STOXX 50 index and Germany's DAX are both down 0.2%,
while FTSE futures decline 0.5%.
The pan-European STOXX 600 index, which fell 0.7% from six week highs on Monday, remains up
15% so far this year as central bank stimulus measures have helped offset concerns over a
slowing economy and rising political tensions.
The latest Refinitiv data point to a 1.8% decline in earnings for corporate Europe in Q3
following a 2.6% fall in Q2 as margins come under pressure.
On the corporate front, newsflow is thin.
Among possible movers, trader point to AB Inbev as the brewer moves ahead in plans
to list in Hong Kong its Budweiser unit. Traders say the stock could fall 1% on talk the company
targets up to $4.85 billion from the IPO, half of the previous target.
Still in dealmaking eyes on ThyssenKrupp after the FT said Advent International, Cinven and
the Abu Dhabi Investment Authority are teaming up to bid for the German conglomerate's elevator
business. Its shares are seen rising 1%.
Finland's Kone is open to a co-shareholding structure in a potential deal to
merge with the German company's elevator division, its chief executive told Bloomberg News.
Meanwhile, a share placement in Zalando by top investor Kinnevik has sent shares
in the German e-commerce company down 6.6% in early Frankfurt trade.
Eni shares could fall after reports of an explosion of a refinery near northern
Italian town of Pavia.
In the UK, eyes on Ocado after the online supermarket and technology company
reported an acceleration in retail sales growth in its latest quarter, helped by additional
capacity from its fourth automated warehouse.
In airlines, which face higher fuel bills stemming from spiralling oil prices, Wizz Air
has increased its fuel hedge position beyond its policy minimum levels, a first sign
that airlines are taking steps to protect themselves from rising costs.
Other stock movers: Sweden's Husqvarna sets new financial targets, nudges up
growth goal; French Connection posts smaller loss, expects sale to conclude by
year-end; Swedbank says authorities can quiz lawyer over money laundering reports;
ADO Properties confirms talks about property portfolio sale; Instone Real Estate
sees FY adjusted revenues of 700-750 mln euros; Soitec Announces Successful
Placement Of Shares; U.S. value fund managers betting shift to value stocks won't last

UK headlines
Britain's Ocado sees retail sales growth accelerate
Recruiter Staffline reports first-half loss
French Connection posts smaller loss, expects sale to conclude by year-end
Aquis Exchange Posts Smaller HY Loss; Says Brexit Uncertainty Impacting Market Volumes

Wizz Air Increases Fuel Hedge Position Beyond Its Policy Minimum Levels
(Danilo Masoni)
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EUROPE SEEN LITTLE CHANGED AS OIL PRICES PULL BACK (0532 GMT)
It seems the oil-related sell-off that hit risky assets following the weekend attacks on
Saudi facilities may loose steam in Europe with early calls from financial spreadbetters calling
for a flat open, as oil prices pull back after a massive spike.
On Monday, concerns over disruptions to global oil supplies and of mounting geopolitical
tensions pulled the STOXX 600 regional benchmark down 0.7% from a 6-week high.
Financial spreadbetters expect London's FTSE to open 7 points higher at 7,328,
Frankfurt's DAX to open 14 points higher at 12,395, and Paris' CAC to open 5
points higher at 5,607.
In Asian hours, oil shed some of its massive gains as the United States flagged the possible
release of crude reserves, but the threat of military action over the attacks on Saudi oil
facilities kept prices elevated and stocks under pressure.
(Danilo Masoni)
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(Reporting by Danilo Masoni, Josephine Mason and Thyagaraju Adinarayan)