Last checked at 
* STOXX 600 and FTSE rise over 1%
* Exor entered a MoU to sell PartnerRe to Covea
Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters. You can share your thoughts with Thyagaraju Adinarayan
(thyagaraju.adinarayan@tr.com), Joice Alves (joice.alves@tr.com), Julien Ponthus
(julien.ponthus@tr.com) in London.
BUYING SOME DIPS: 5 REASONS WHY (1506 GMT)
"With bond yields at even more depressed levels now, positioning no longer complacent,
valuations close to historical averages, and aggressive stimulus, the lack of alternatives may
well push investors to buy this dip, once again", Barclays' European equity strategy team wrote
this morning, warning that volatility should remain high.
While they advocate for patience and "a more balanced and diversified portfolio allocation",
they've come up with 20 stocks which they deem are opportunities for medium-term investors.
Here's their list:
BPOST
SBM Offshore Energy
Anglo American
Faurecia
Vodafone
Lloyds
Koninklijke Philips
Airbus
Schneider Electric
Delivery Hero
Tesco
ASML
Roche
RELX
Grifols
Serco
Segro
Reckitt Benckiser
Zurich Insurance Group
Avast
(Julien Ponthus)
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ITALY LIKELY TO SHUT SCHOOLS, MARKETS CUT GAINS (1413 GMT)
To contain the coronavirus outbreak, Italy is likely to shut schools, cinemas and theatres
and that's made investors who are buying the dip to wonder if the Fed's bazooka or the U.S.
election boost could be enough to solve the health crisis.
The news report on Italy's closures cut some gains in European stocks. Though a lockdown
isn't great, football matches could keep them entertained as Italy is planning to let play all
Serie A games behind closed doors.
It is not all about the hit on demand but there is also concerns on the supply chain
depending on the extent of the disruption caused by the coronavirus across the world, says
Rupert Thompson, Chief Investment Officer at Kingswood.
(Joice Alves)
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CAN CORONAVIRUS SHAKE UP AIRLINES OWNERSHIP RULES? (1200 GMT)
Aviation has stringent ownership and control (O&C) rules that restrict the percentage that a
foreign investor can have in airlines.
Now as the sector struggles with many companies cancelling flights, UBS says it sees global
industry bodies such as the ICAO and IATA, regional regulators and airlines pushing for
liberalising O&C, which could eventually lead to a consolidation of the sector.
"Material consolidation leads to increased global traffic growth, better route scheduling,
increased investment, an improved product and fewer carbon emissions," writes UBS but there are
also downside to it, including "less competition on certain routes, inefficient players exiting
the market which in short term leads to job losses," UBS adds.
Below is UBS's four possible scenarios for the industry:
Here are the potential winners and losers if the industry eases global airlines ownership
rules:
(Joice Alves)
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STOCK PICKING: "DURING PERIODS OF UNCERTAINTY, CASH IS KING" (1019 GMT)
This quote pretty much sums up a Jefferies' note which looks into which stocks to buy or to
avoid in the face of the coronavirus crisis.
Cash and cash flows are key metrics in this stock picking exercise with a focus to avoid
companies which could experience a "cash crunch should supply chains and demand fail to
normalise quickly".
Another advice is to avoid large working capital, fast growing cash burners and on the
contrary to focus on "cash proxies" with high cash-to-market cap ratios and positive FCF
conversion.
AS they stress, buying the dip in times like this is a dangerous exercise but in order to
limit the risk, they advise going for quality companies which have already went through a big
correction.
Key also is to target those which have a history of rebounding on these low levels and have
attractive earnings growth and ROEs.
Here's their pick of European stocks with high cash to market capitalisation:
(Julien Ponthus)
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OPENING SNAPSHOT: MARKET ODDITIES (0837 GMT)
European futures were clearly pointing to a positive open this morning but that didn't
prevent bourses to open moderately in the red despite Wall Street losing 3% last night.
Interestingly, European stock futures carried on trading in the black while Paris,
Frankfurt, Milan or London stock indices were deeper into negative territory.
It later made sense with European benchmarks slowly but firmly rising back to positive
territory. At 0840, the STOXX 600 was up 0.7%.
Meanwhile, notably U.S. futures were very comfortably trading in the black, but that clearly
can be attributed to Joe Biden's surge during Super Tuesday.
Anyhow, there's some decent market price action among individual stocks, mainly for Intu
which collapsed wiping over a third of its market value in just a few minutes after open as it
failed to raise capital.
That clearly weighed on peer Hammerson which was one of the top losers on the STOXX 600
falling 3.5%.
Travel and Leisure stocks are still feeling the heat from the virus with Wizz Air losing
some ground after cutting some flights and further reducing capacity. The sector is down 1% with
BA owner ICAG -3.4%.
Among other top movers is Exor, up 3.5% after its MoU to sell PartnerRe to France's Covea
for $9 billion in cash and Dialog Semi which said it expects its chip supply chain to return to
normal in Q2 2020.
Among other winners, miners and raw material stocks are up on rising oil prices following
OPEC plans to cut output. The index is the top gainer, up 1.6%.
(Julien Ponthus)
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WILL BOE FIRE ITS BAZOOKA? (0821 GMT)
Powell's emergency rate cut has raised expectations that global central banks would follow
suit, and the Bank of England is definitely one to watch out for.
Money markets are now fully pricing in a BoE rate cut of 25 bps on March 26 when it next
meets, a jump from an 80% probability before the Fed cut. It will also be Andrew Bailey's first
meeting.
But Citi believes there is a chance BoE would wait a little longer and be less aggressive:
* "First, the BoE may want to keep some powder dry as Brexit puts new cliff edge risks on
the
horizon.
* Second, the UK government has the opportunity to react to the Covid-19 crisis with fiscal
measures in the Budget next week 11 March.
* Third, the Bank is in the process of handing over leadership from Carney to Andrew Bailey
in the
coming weeks.
* Fourth, the BoE did not cut rate between meetings even during the 2008 crisis".
(Thyagaraju Adinarayan)
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ON THE RADAR: WIZZ, INTU AND GRIM TRADING UPDATES (0753 GMT)
We’re off peak earnings for Q4 but among the trading updates published today is Dialog Semi
which expects its chip supply chain to return to normal in Q2 2020.
In the M&A beat: Investment group Exor announced it entered a MoU to sell its 100% stake in
reinsurer PartnerRe to France's Covea for $9 billion in cash.
Possible boost for Roche as China will use an arthritis drug to treat some coronavirus
patients in severe conditions and it wins a fast-track review status in the US for a new
diagnostic approach for liver cancer.
Another roller coaster day ahead for Intu which failed to raise capital.
Quite a grim outlook from German chemicals group Evonik Industries which sees specialty
chemicals sales expected grow slowly due to a soft global economy.
Same for Engineering group Andritz which expects a slight increase in sales and a flat EBITA
this year.
Wizz Air is seen losing some ground after cutting some flights and further reducing
capacity.
Mixed pre markets for Legal and General – after posting a 12% rise in 2019 operating profit.
Struggling Pandora will cut 180 staff and eliminate an organizational layer in an effort to
move closer to consumers.
(Julien Ponthus)
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MORNING CALL: WHO KNOWS? (0630 GMT)
European futures are currently rising by about 0.5% but there's absolutely no visibility on
today's session. Yesterday's Fed cut, which was meant to bolster sentiment, spooked the market
more than anything else and with the US 10 year trading below 1%, we're in unchartered
territory.
There's no clear trend either from Asian bourses after Wall Street's fall overnight.
On the bright side, U.S. futures are up but that's maybe only due to Joe Biden's new found
momentum against Bernie Sanders after winning at least eight large states on Super Tuesday.
"Stock market futures getting a boost from this - well they needed the help", wrote Chris
Bailey, European Strategist at Raymond James.
(Julien Ponthus)
*****
(Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)
