LIVE MARKETS-"The most unstable trade framework seen since the Second World War"

* European stock futures down 1 pct * 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 "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)