STOCKS NEWS EUROPE-Buy utilities, sell energy before results-BNP

The European energy sector could be hit during the third-quarter earningsseason, while utilities should hold up well, reckons BNP Paribas, and recommendsplaying the theme via options.

"We are looking for sectors with resilient margins, decent earnings trendsand with little exposure to Europe," BNP's derivatives strategists write in anote.

It suggests buying November 2012 puts on the STOXX 600 basic resourcessector , noting that "analyst consensus' on the sector is continuing toweaken", while a strong sterling and Chinese growth concerns also weigh.

For the equivalent utilities index it suggests calls, noting thesector's "excellent earnings momentum and the lowest change in marginexpectations for 2012". Positioning further backs the trade, with utilities "themost underweight sector in Europe".

Utilities are expected to report a 12.9 percent year-on-year rise in thirdquarter earnings, with risks skewed to the upside, according to Thomson ReutersStarmine. In contrast, energy profits are forecast to fall by 2.8 percent.

In Europe overall earnings are seen down 1.1 percent. Reuters messaging rm://antonina.vorobyova.thomsonreuters.com@reuters.net