UPDATE 2-European shares dip ahead of new U.S. sanctions on Russia


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    * STOXX down 0.4 pct
    * WPP opens sharply lower after Sorrell quits
    * Whitbread rallies after activist move
    * Russia-exposed stocks underperform

 (Updates prices, adds details)
    By Danilo Masoni and Helen Reid
    MILAN/LONDON, April 16 (Reuters) - European shares fell on
Monday as investors awaited new U.S. sanctions on Russia, while
losses were limited as the market expected there would be no
immediate military escalation in Syria following the weekend's
American-led strike.
    Trading remained cautious as tensions between Western powers
and Russia persisted and markets braced for new U.S. sanctions
on Russia over its continued support of Syrian President
Bashar-al Assad.  urn:newsml:reuters.com:*:nL8N1RS0BR  urn:newsml:reuters.com:*:nL1N1RS08K
    "Markets react to economic sanctions (in a way that they do
not react to air strikes), as specific assets are directly
affected," said UBS chief economist Paul Donovan in a note.
    The pan-regional STOXX 600  .STOXX  index fell 0.4 percent.
while among other European benchmarks, the FTSE  .FTSE  tumbled
0.9 percent and Germany's DAX  .GDAXI  was also down 0.4
    Over the weekend, the United States, France and Britain
launched 105 missiles targeting what the Pentagon said were
three chemical weapons facilities in Syria in retaliation for a
suspected poison gas attack in Douma.  urn:newsml:reuters.com:*:nL8N1RS0BR
    Shares in some Russia-exposed companies underperformed as
investors awaited the new sanctions on Russia, which a U.S.
diplomat said would target companies dealing with equipment
related to Assad and chemical weapons use. 
    Precious metals miner Polymetal  POLYP.L  fell 9.4 percent
and miner Evraz  EVRE.L  fell 6.8 percent, while Austrian lender
Raiffeisen Bank  RBIV.VI , which gets a substantial chunk of
revenues from Russia, declined 3.7 percent. 
    Swiss pumpmaker Sulzer  SUN.S , which was last week freed
from U.S. sanctions related to its Russian investor Viktor
Vekselberg, slipped 1.5 percent. Over the weekend Sulzer said
its business was "fully back to normal" after it received a
second licence fully unblocking its assets.  urn:newsml:reuters.com:*:nZ8N1QN024
    Elsewhere management changes and M&A caused some sharp
    Shares in advertising group WPP  WPP.L  fell 6.1 percent
after chief executive and founder Martin Sorrell quit, leaving
the group without a boss at a time of huge change in the
industry.  urn:newsml:reuters.com:*:nL8N1RT1AI
    "The fact is that there is a lot of uncertainty ahead. It is
not clear whether the current margin targets or dividend payout
will survive management change," said Citi analyst Thomas
Singlehurst, who reiterated however his buy rating on the stock,
citing the company's current depressed valuation.
    WPP shares, which have already fallen 30 percent this year,
pared part of their losses and were down 2.1 percent. Analysts
and peers have speculated that the group of 200,000 people could
be broken up without Sorrell at the helm.    
    The top STOXX gainer was Whitbread  WTB.L , up 6.2 percent
after U.S. activist investor Elliott Management said it now held
the largest stake in the coffee-shop and hotel operator.
    Amsterdam-listed telecoms firm Altice  ATCA.AS  jumped 5.4
percent late in the day, after a report that French conglomerate
Bouygues  BOUY.PA  is considering a bid for Altice France with
other investors. urn:newsml:reuters.com:*:nL8N1RT4X1
    French peer Iliad  ILD.PA  also jumped 4.6 percent on the
prospect of consolidation in the industry, while Orange
 ORAN.PA  climbed to the top of the CAC 40, up 1.6 percent.
    Volkswagen  VOWG_p.DE  shares fell 2.9 percent to the bottom
of the DAX after the carmaker said it was open to buying a
majority stake in U.S. truckmaker Navistar.  urn:newsml:reuters.com:*:nL8N1RT30S
    Elsewhere, some earnings were disappointing. Software AG
 SOWGn.DE  was among the leading fallers, down 6.1 percent.
Traders said the fall was due to weaker-than-expected quarterly
revenues at its Digital Business Platform business. 

 (Reporting by Danilo Masoni, Editing by Robin Pomeroy and Toby
 ((Danilo.Masoni@TR.com; +39-02-66129734; Reuters Messaging:
danilo.masoni.thomsonreuters.com@reuters.net; On Twitter https://twitter.com/damasoni))

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