LIVE MARKETS-Wanna play negative bond yields? Opt for high-div

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LIVE MARKETS-Wanna play negative bond yields? Opt for high-div

* European shares open sharply higher

* China March factory activity unexpectedly grows

* UK parliament votes on Brexit options at 1900 GMT

* EasyJet launches Brexit warning, DSV to buy Panalpina

April 1 - 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:


With 10-year Bund yields back in the red following the recent policy shifts by central banks, quality and high-div stocks are back on the radar screens with investors pondering which one is better placed to benefit from the latest shift in market conditions.

Morgan Stanley (NYSE: MS ) would put their money on high-div.

"We prefer to play low bond yields through High Dividend Yield stocks rather than Quality as valuations are much less demanding," analysts at the US bank say in a note.

"Quality has been the biggest beneficiary of low bond yields in this cycle but going forward we prefer the risk-reward of High Dividend Yield stocks," they add.

They also highlight that buying high dividend stocks is not necessarily a defensive, low beta trade.

"Buying dividend stocks isn't an entirely defensive strategy as sectors that currently have the highest dividend yield in the market are a mix of traditional defensive (Utilities, Telecoms) and high beta/cyclical sectors (Banks, Energy, Autos)," they note.

That being said, they update their high & secure dividend yields basked.

Within this basket of 41 stocks, 18 are rated overweight: DNB DNB.OL , KBC KBC.BR , Lloyds LLOY.L , Siemens (NS: SIEM ) SIEGn.DE , Rexel RXL.PA , BAE Systems BAES.L , Saint-Gobain SGSI.BO , Volkerwessels KVW.AS , Greene King GNK.L , BP BP.L , Total TOTF.PA , AXA AXAF.PA , Direct Line DLGD.L , Covestro 1COV.DE , Merlin Properties MRL.MC , Evry EVRY.OL , Orange ORAN.PA and Iberdrola IBE.MC .

To conclude here's an MS chart showing that the UK and Europe offer the highest 12-month forward dividend yield in the DM world after Australia.

(Danilo Masoni)



Data showing that factory activity in China unexpectedly grew for the first time in four months in March has ignited a rally in European shares at the open, lifting the STOXX 600 up 0.9 percent in a broad-based bounce led by cyclical stocks.

"Some thankfully better than forecast data from China set the European markets up for a decent open as April got underway," says Connor Campbell, analyst at

The export-oriented auto sector .SXAP is up an outstanding 2.9 percent, with activity peppered up by ongoing talk about possible deal-making in the industry, while among other cyclicals, basic resources stocks .SXPP are up 2.4 percent and banks .SX7P up 1.1 percent.

Defensive sectors are underperforming but only utilities .SX6P are trading in the red, down 0.1 percent, while a 7 percent fall in easyJet EZJ.L (after the airline warned that demand and pricing were suffering from Brexit jitters) kept its sectoral index .SXTP around parity.

All country indices are trading in positive territory in early deals.

(Danilo Masoni)



European shares are set to rise sharply on the first trading day of the second quarter with stock index futures rising 0.8 percent following unexpected growth in Chinese factory activity in March. FTSE futures are up 0.2 percent ahead today's parliament votes on different Brexit options.

On the corporate front, Panalpina is expected to rise as much as 15 percent at the open after Denmark's DSV agreed to buy the Swiss freight forwarder in a share swap valued at 4.6 billion Swiss francs.

Still in dealmaking, Fiat Chrysler could rise further (up 1-2 percent premarket) after Bloomberg reported that PSA Group and the Italian American carmaker are exploring a partnership to share investments to build cars in Europe, while oil services firm Saipem could also get a lift from media speculation it could exit its drilling business.

In earnings, traders said a better-than-expected update from Apple (NASDAQ: AAPL ) supplier Foxconn could help lift shares of European suppliers of the U.S. tech giant, such as AMS and Dialog Semi or STMicro, while Easyjet could fall 3-5 percent at the open after giving a cautious outlook for the second half of the year. A sequential rise in Macau gambling revenue could support shares in Asia-exposed luxury stocks.

Here are some UK headlines (check out the previous post for other headlines):

EasyJet warns of Brexit hit to European demand International announces pricing for up to $3bln listing Energy sees higher FY revenue Group ceo will retire before end of FY 2020 Serco extends contract with Dubai Metro for up to $185 mln Water Submits Revised Business Plan For 2020-2025 Selumetinib gets breakthrough therapy designation Updates On Review Of Charity Donations, Delays Results Again Gleeson Says Appointed Lazard To Explore Options For Strategic Land Business LK Bennett chain circled by Ashley, Dune and Feng

Novartis pays $310 mln upfront for inflammation specialist IFM Masoni)



European stock futures have opened sharply, up 0.4-0.9 percent, confirming earlier indications from spreadbetters for a strong start of the second quarter following an unexpected growth in Chinese factory activity in March.

On the corporate front, Panalpina PWTN.S is on the watchlist after Denmark's DSV DSV.CO agreed to buy the Swiss freight forwarder in a share swap valued at 4.6 billion Swiss francs.

Meanwile talk about a possible dealmaking in the auto sector contines with Bloomberg reporting at the weekend that PSA Group PEUP.PA and Fiat Chrysler FCHA.MI are exploring a partnership to share investments to build cars in Europe.

Here's your early morning headlines roundup:

Denmark's DSV to buy logistics company Panalpina in $4.6 billion deal Group and Fiat Chrysler explore European venture - Bloomberg Tinto cuts 2019 iron ore shipment outlook after cyclone says compliance manager's departure not connected to investigation extends mandate for Italian bank Carige's administrators to Sept. 30 asks EU antitrust regulators to probe Nokia (HE: NOKIA ) patents Masoni)



European shares are expected to start the first session of the second quarter on the up after China's official purchasing managers' index released on Sunday showed factory activity unexpectedly grew for the first time in four months in March. spreadbetters expect London's FTSE .FTSE to open 32 points higher at 7,311, Frankfurt's DAX .GDAXI to open 98 points higher at 11,624 and Paris' CAC .FCHI to open 42 points lower at 5,393, a trader said.

Over in Asia, stocks rallied as the positive Chinese factory gauges and signs of progress in Sino-U.S. trade talks boosted sentiment, although another defeat for British Prime Minister Theresa May's Brexit deal added to sterling's woes. British Parliament will vote again on different Brexit options later today and then May could try one last roll of the dice by bringing her deal back to a vote in parliament as soon as tomorrow. Parliament is due to vote at around 1900 GMT. Masoni)


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