LIVE MARKETS-Watch the virus' reproduction rate

* STOXX 600 flat, FTSE 100 up 0.6%
* Ingenico top riser in Europe on Worldline takeover offer
* UK manufacturing ends longest decline since financial crisis

Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters and anchored today by Joice Alves. Reach her on Messenger to share your
thoughts on market moves: joice.alves.thomsonreuters.com@reuters.net



WATCH THE VIRUS' REPRODUCTION RATE (1124 GMT)
A key indicator for stocks owners is the pace by which the coronavirus spreads, Jefferies
analysts wrote in equity strategy note this morning.
Any indication that the reproduction rate is accelerating or decelerating versus a roughly
50% growth rate per day is something worth considering, they argue.
"Presumably, if the rate rises above the line the markets should be more concerned and
vice-versa", they write.
Here's their chart:
(Julien Ponthus)
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WHY UTILITIES ARE SO HOT (1037 GMT)
With a nearly 10% relative outperformance so far in 2020 utilities are becoming a
hot spot for investors.
It may be for their defensive qualities and bond-like features that utilities are getting
attention, as virus fears slow economic growth expectations, but it also looks like the
transition to a greener world is going to inject new life into this investment space.
For Barclays, utilities are now a growth sector.
"We believe the EU's and UK's ambitious targets to achieve 'Net Zero' emissions by 2050 are
achievable, placing utilities at the forefront of a 3.7 trillion euro investment boom, and
making the sector a key beneficiary of the coming industrial revolution," the UK bank writes.
Yet the transition is not going to be pain-free and while Barclays sees winners, there will
be losers too.
Among the latter it sees gas distribution infrastructure and power transmission solar
networks, while among the former are renewable generation, power infrastructure, gas
transmission infrastructure and hydrogen.
For more on utilities:
Utilities: flying like a FANG
Davos: Watch those utilities

(Danilo Masoni)
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THE CURSED AUTO SECTOR: CORONAVIRUS DENTS PRODUCTION (1015 GMT)
A total of 362 people have succumbed to the deadly virus, leaving the SARS comparison far
behind and businesses worried about supply chain disruptions and falling demand.
Autos, which had a rough 2019, are no exception.
With Wuhan completely shut and the rest of China in extended Lunar New Year holidays, Citi
analysts expect automakerts to take hit with VW being most exposed in terms of production.
Citi sees 40,000 per day reduction in vehicle production in China -- "assuming two weeks of
meaningful impact, this could imply c.1.5-2% drag on annual production and retail sales".
Car parts supplier Valeo and OEMs Daimler and Renault are
seen taking a bigger hit from the output declines. The bank has a "sell" rating on all three of
them.
This chart clearly shows how autos have been dented the most by virus fears:

Autos are clearly becoming the stock market scapegoat of the coronavirus scare here in
Europe. UBS analysts say among the two big underperformers with the biggest exposure to the
epidemic in China, autos are a much bigger concern than luxury stocks.
"On a multi-month view, our Luxury analysts are much more bullish than are our Auto
analysts", UBS writes.
On the big scheme of things, European industrials are holding up, they note.

Another interesting thing is that they are not ready to give up their structurally long
stance on Chine equities.
They do acknowledge however that given the gravity of the situation, they are looking for
"the right hedges".

(Thyagaraju Adinarayan and Julien Ponthus)
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THE HARDER THE FALL, THE BIGGER THE BOUNCE (0928 GMT)
It may sound simplistic but in essence that's how many see the opportunity created by the
coronavirus outbreak in China.
Among these is JPMorgan, who believes stocks will make further all-time highs before the
next U.S. recession strikes.
"The Coronavirus outbreak is likely to keep markets under pressure near term. That said, the
more the markets fall in the short term, the more they are likely to rebound once the number of
cases appears to be peaking," strategists at the U.S. bank led by Mislav Matejka say.
"Fundamental backdrop is supportive, in our view, and the fallout from the outbreak is
unlikely to hurt activity prints over the medium term," they add.

(Danilo Masoni)
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OPENING SNAPSHOT: INGENICO UP, WORLDLINE DOWN (0834 GMT)
European bourses opened in positive territory with Ingenico as expected topping the Stoxx
600 index after Worldline agreed to buy the French payments company in a deal
which would create a new European champion in the sector.
It is also worth noting that Ingenico shares are trading well below Worldline's 123.1 euro
per share offer price. Worldline shares meanwhile are sliding 5%.
Other top movers in Europe are Siemens Healthineers down 4% and Julius Baer
off 4%, both reported lower profits.
Ryanair shares are jumping 3.6% after company third quarter revenues beat estimates.

(Joice Alves)
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ON OUR RADAR: UK, DRUGMAKERS, RYANAIR, WORLDLINE (0755 GMT)
Futures point to a higher open in Europe after Brexit and reports on Saturday that Boris
Johnson would consider a looser trade agreement with the European Union, similar to the bloc's
ties with Australia, rather than follow EU rules to reach a closer deal.
Johnson is expected to give a speech on trade today. Traders are also expecting some
eurozone and UK PMI numbers, which will be released this morning.
In terms of single stocks, Siemens Healthineers shares are down 6.5% in early
Frankfurt trade after it said Q1 profit fell on higher diagnostic gear costs
Meantime, UK drugmaker GlaxoSmithKline is also on the radar after it said it is
collaborating with the Coalition for Epidemic Preparedness Innovations to develop a vaccine for
the coronavirus outbreak.
In terms of M&A, traders see payments company Ingenico shares rallying 17% after
Worldline agreed to buy its French peer in a deal which would create a new European
champion in the sector.
Ryanair shares are seen 1-2% higher after 3Q revenues beat estimates but the company
said it may have to push back its long-term target of flying 200 million passengers per year by
as much as two years due to delays in the delivery of Boeing's <BA.N 737> MAX jet.
Some other earning results could move stocks: Swedish telecoms operator Tele2 Q4
earnings beat forecast company launched a new restructuring programme.
Julius Baer is seen 2% lower as it said it will cut 300 jobs after 2019 profit
drop.

Other corporate headlines:
Sri Lanka to probe graft accusations over Airbus deal
Imperial Brands names Stefan Bomhard CEO
(Joice Alves)
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EUROPEAN STOCKS SEEN HIGHER (0650 GMT)
European bourses are expected to open higher this morning as investors get some relief from
the fact that the UK left the euro zone ending years of uncertainty around the Brexit outcome.
Fears from Asia will likely put a brake on the enthusiasm. As traders in Asia returned from
a week-long Lunar Year break, shares across the region and global commodity prices stumbled on
concerns that the coronavirus epidemic will hit demand in the world's second-largest economy.
Investors will also have their eyes on PMI data from the euro zone, Germany, France, Italy,
Netherlands and Spain that will be released this morning.
Back in the UK, today's PMI data will likely see little market reaction as services PMI due
Wednesday matters more for the economy.
Financial spreadbetters at IG expect London's FTSE to open 15 points higher at 7,286,
Frankfurt's DAX to open 21 points up at 12,981 and Paris' CAC to open 12 points higher at
5,806.

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