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LIVE MARKETS-More pressure in store for European retailers - Deutsche

* European stocks wilt on 2018 open

* Investors take profits on miners after strong run

* Autos stocks dented by weaker car sales data

Jan 2(Reuters) - Welcome to the home for real time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Helen Reid. Reach her on Messenger to share your thoughts on market moves: helen.reid.thomsonreuters.comzreuters.net

More pressure in store for European retailers - Deutsche Bank (1141 GMT)

There's a big focus on retail in notes this morning, with the big UK retailers Kit just mentioned due to report next week. Weighing in on non-food retailers, Deutsche Bank analysts say macro conditions will continue to be pretty unhelpful and performance will be largely determined by structural changes in a disrupted industry. Here are five investment tips and themes DB suggests to navigate this:

1) Buy the value retailers DB's top picks are AB Foods, B&M and Boohoo which could all benefit from consumers shifting to cheaper stores 2) Watch the value traps in mid-market apparel retail M&S, Next and Debenhams should be avoided despite low valuation multiples, DB reckons, though it sees a "slightly better" year for them in 2018 3) Back online brands over the platforms DB prefers ASOS and Boohoo over Showroomprive and Zalando, saying the UK online fashion starlets are more differentiated and can drive stronger growth 4) Be sceptical of transformation stories It's a difficult backdrop for successful turnarounds in the sector and DB downgrades Carpetright for that reason 5) Buy travel companies at the right price Airport retailers such as Dufry and WH Smith could benefit from increasing airport traffic boosting their captive consumer base

(Helen Reid)

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X-mas: analysts watching UK "Big Four" supermarkets vs. discounters (1131 GMT)

Following the Christmas period, it looks like there's a lot of interest in retailers - UBS analysts are weighing in with their thoughts on UK grocers, which have been feeling the heat from the discounters as well as an inflation-pressured consumer. "With UK disposable income squeezed, Christmas trading could be a bellwether for down-trading in 2018," UBS analysts say in a note. "But the Big-4 have tried to minimise reasons for shoppers to switch," UBS adds, comparing prices of turkeys at Aldi, Lidl, Asda, Tesco and Morrisons. UBS also highlights that Tesco had the best sales momentum of the four biggest UK supermarkets going into Christmas, with its price position "on point". Here's how UK grocers' shares have done over the past two years:

(Kit Rees)

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2018, a vintage year for merger arb? (1110 GMT)

More and more investors are hoping Donald Trump's tax overhaul will trigger a wave of M&A and produce a vintage year for merger arb funds. "If the reform kicks in, one may expect increased M&A activity, which could be bolstered by additional resources made available by tax savings and possibly cash repatriation measures," writes Roberto Bottoli, a portfolio manager for merger arbitrage strategies at GAM Investments. Lyxor also has "very strong convictions" on merger arbitrage this year. (Julien Ponthus)

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Morning snapshot: European shares dip (1023 GMT)

The first trading session of the year is turning out to be a rather muted one, with losses among miners and autos weighing. A stronger euro also isn't helping, with the currency up at its highest level since September last year. Looking over market commentary from this morning and most analysts and traders were expecting the manufacturing data out of China to support miners, but instead it looks like there's some profit-taking going on given the sector is coming off its highest level since January 2013. And here are the top STOXX gainers and losers two hours into the European trading session:

(Kit Rees)

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What you need to know so far (0750 GMT) Good morning and happy new year! European stocks are gearing up for a positive start to 2018 on Tuesday, with liquidity returning to normal levels after the holiday lull. Strong oil and metals prices were likely to support markets higher as investors awaited manufacturing data for the region later in the morning. Britains FTSE could be the exception, with stock futures trading down 0.1 percent and suggesting the leading stock indexs impressive run of record highs may begin to come up against some resistance. On the corporate front, news that the outgoing CEO of the worlds biggest catering firm Compass Group died in a seaplane crash on New Years Eve could weigh on the stock. The company pushed forward incoming CEO Dominic Blakemores starting date to Jan 1. And a new development in the Steinhoff accounting scandal will pile more pressure on the sinking stock: the South African retailer said its 2015 results would also have to be restated. In other company news and potential stock movers: Glencore sells Australian coal mine to Gupta's GFG Alliance, Siemens to gauge interest of state funds in Healthineers IPO-CEO and BA owner IAG to buy insolvent Austrian holiday airline Niki. (Helen Reid)

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No Xmas magic for UK retailers (0730)

Jefferies believes UK consumers spent "cautioulsy" this Christmas and that 2018 is set to be another "tough" year given ongoing Brexit negotiations and persistent headwinds to the British economy. Here's how the UK food and drug retailers underperformed the FTSE 100 last year:

(Julien Ponthus)

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Futures point to upbeat start to 2018 trading (0706 GMT)

Contrary to spreadbetters' indications earlier, futures have opened higher for the euro zone's leading STOXX 50 index as well as the DAX and CAC. The FTSE meanwhile looks set for a slightly weaker open with futures trading down 0.1 percent after having finished 2017 with a series of new record highs. (Helen Reid)

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Manufacturing data to point to sustained economic growth (0655 GMT)

European manufacturing PMIs at 0900 GMT will deliver the first datapoint investors will be watching as a harbinger of whether the region's impressive economic growth is likely to be sustained and continue supporting stocks. "We think the PMIs have been a little too high recently, especially in manufacturing which points to GDP growth of 1.3% quarter-on-quarter in Q4," write Societe Generale analysts. They reckon Spanish PMIs may take the hit from the Catalonian crisis, while Italy's reading of manufacturing activity is likely to rise. The UK manufacturing PMI (out at 0930 GMT) has been surprisingly strong recently. "As with the CBI survey, we see no obvious reason for short-term weakening but, compared to that survey, the surge in the PMI looks a little extreme so we expect a small fall to 57.5, more as a consolidation than a genuine weakening," they write. Below you can see the FTSE's surge in December - up 5.3 percent over the month - boosted by rising metals prices.

(Helen Reid)

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European shares to begin new year hesitantly (0630 GMT)

Good morning and happy new year! Spreadbetters see Germany's DAX opening 41 points lower and France's CAC 40 sliding 8 points at the open on the first trading day of the year, despite generally positive Asian stock markets overnight buoyed by strong manufacturing data from China. The FTSE meanwhile is likely to set a fresh record in early deals - maintaining the momentum of the past few weeks as traders trickle back in after the festive season. "Traders will be looking for clues where big money will park funds for 2018 in the first few days of January," writes Jasper Lawler, analyst at LCG Markets. "We think the price breakout in UK blue-chip stocks means momentum will be in their corner for the opening quarter of 2018." (Helen Reid)

(Reporting by Danilo Masoni, Helen Reid, Kit Rees and Julien Ponthus)