* European shares dip after flat start * Heavy earnings week begins * AMS soars after raising outlook, doubling revenue * Sanofi buys Ablynx for 3.9 bln euros, Ablynx +20% Jan 29 (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.com@reuters.net RISK APPETITE DROVE 1 TRILLION EUROS INTO EUROPEAN FUNDS LAST YEAR (1222 GMT) It's a good sign for the European fund industry: over the course of last year assets under management increased from 9.4 trillion euros to 10.4 trillion, according to Lipper data. This was also an all-time high in terms of AUM for Europe's fund industry. Bond funds were the best-selling asset type for 2017, though Global Equity was the winner among long-term mutual funds. Question now is - will 2018 see more of the same? (Kit Rees) ***** BUND MILESTONE WEIGHS ON INCOME STOCKS (1200 GMT) The benchmark German five-year bond yield just turned positive for the first time since 2015 and the 10-year U.S. treasury yield is at its highest since early 2014. The equity market seems to be following the usual pattern of selling solid dividend payers -- consumer staples, utilities, telecoms -- when fixed-income yields start looking more attractive. All those categories have helped propel the STOXX 600 lower in late morning trading, while banks whose business benefits from higher rates are up. However, JPMorgan sees a sustained pick-up in bond yields as very important for the Euro zone's performance: "A sustained pickup in yields is required for Eurozone equities to perform better again ... If bond yields keep moving higher, as we expect, value should work and thus help the performance of the European market." (Tom Pfeiffer) ***** STRONG EARNINGS NEEDED TO BUOY STOXX 600 ABOVE 400 (1119 GMT) What could push the STOXX 600 sustainably above the 400-point level? It's flirted with it previously but never held out at those altitudes for long. Earnings are the key, JP Morgan analysts say. "Poor profitability was a major drag on Euro zone performance in the current upcycle," they note. European earnings per share haven't yet reached their pre-crisis 2008 levels while MSCI World earnings surpassed those highs long ago (see chart). But earnings beat expectations last year and should do so again in 2018, JPM says. Euro zone earnings are highly geared to GDP, which the bank's economists see growing 2.9 percent this year. On top of that valuations aren't demanding, relatively speaking. Both the STOXX price-to-earnings and price-to-book multiples relative to MSCI World are lower than at each of the past three market peaks, JPM notes. JPM has a year-end target of 430 for the STOXX 600, betting on the 'sustained breakout' above 400 which has for so long eluded the index. Their one note of caution? "FX is a wild card..." (Helen Reid) ***** IT'S NOT GOING TO BE A HAPPY VALENTINE'S FOR EUROPEAN FIRMS (1101 GMT) Sometimes you've got to break up to make up, at least with your shareholders - BAML's credit strategists are expecting to see an increase in Europe's big conglomerates slimming down this year. "We believe that the corporate "break up" theme is likely to grow in prominence this year as activist investors continue to warm to Europe, and rising equity markets expose the inefficiencies of big conglomerate companies," write BAML's credit strategists. BAML cites recent examples of Continental and Thyssenkrupp, pointing to Germany, France and the Netherlands as having the greatest share of conglomerates - thus the most likely areas to watch for corporate divorces. (Kit Rees) ***** CHIPMAKER SHARES PARE GAINS AFTER NIKKEI IPHONE REPORT (1045 GMT) The euphoria among European chip stocks after the blow-out guidance from AMS just faded a little after Nikkei Asian Review said Apple had told suppliers it will halve its Q1 production target for the flagship iPhone X to 20 million units from 40 million envisaged in November. Nikkei did not disclose the source for its report. Link: s.nikkei.com/2njmW Dialog Semiconductor, STMicroelectronics, Infineon and IQE have given up a chunk of their earlier gains. AMS is still up 18 percent, with analysts speculating that the Austrian company's upgraded guidance is driven partly by prospects for new business with smartphone makers beside Apple. (Tom Pfeiffer) **** AMS SEEN FROM THE STREET (1015 GMT) A 25 percent surge in ams has made the chipmaker the main focus in Europe's share trading this morning. The outstanding move comes after a surprisingly solid update that could help ease worries over the sustainability of a rally in richly valued tech stocks in a week where results from Facebook, Amazon and Apple will put the sector back at the fore of investors minds. We'll tell you more about tech but meanwhile here's a quick recap of sell-side vies on ams' results. Baader Bank: "ams referred to a range of sales pipeline opportunities in smartphone and consumer applications (3D, optical and spectral sensing) that were clearly coming into view.... Accordingly, the current valuation corresponds with a significant discount to the peer group average of about 14x, reflecting the single customer risk with Apple." UBS: "ams AG pre announced Q4 results with revenues expected to reach €470.3m vs UBSe €460m and cons €456.5m driven by 3D sensing and advanced light sensing (we believe Apple)." ZKB: "Guidance for 2019 has been increased considerably from EUR 1.5 bn to EUR 2.2 bn. Significantly visible growth opportunities in smartphone and consumer applications were put forward as the reason" Tech stocks remain the biggest sectoral gainers in Europe over the last 12 months but their rally has stalled as investors switched into banks and autos as the new year started. (Danilo Masoni) ***** WHAT YOU NEED TO KNOW BEFORE EUROPE OPENS Hedge fund Elliott Management buys stake in UK pay-TV group Sky MEDIA-Novo Nordisk is planning to raise bid for Belgian Ablynx- Bloomberg GKN received several approaches for business after Melrose bid- FT Roche wins FDA's breakthrough therapy label for autism drug Apple component supplier AMS doubles 2017 revenue, raises outlook German industrial workers to stage 24-hour strikes Banco BPM could be part of new wave of banking mergers - CEO Spain's Bankia posts a Q4 loss of 235 mln euros after BMN integration Provident Financial former execs sue lender over "unfair dismissal" ACS/Hochtief consortium picked for L.A. airport rail project Deutsche Bank to hike bonuses to more than 1 bln euros for 2017 - FAS France's Engie acquires Brazil's ACS Israeli investor secures 22.5 pct stake in Germany's TLG Immobilien MORNING CALL: EUROPEAN STOCKS TO RISE AS HEAVY EARNINGS WEEK BEGINS (0718 GMT) Good morning and welcome to Live Markets. Futures indicate a strong start for European stocks as a heavy week for corporate earnings begins. Investors are scrutinising this earnings season closely as a test of the foundations of the stellar run-up in equities, and to see whether last year's impressive earnings recovery has legs. In Asian trading the bull run continued, buoyed by strong earnings. Meanwhile the dollar managed to edge up from lows but remains under pressure. (Helen Reid) ***** (Reporting by Danilo Masoni, Helen Reid, Kit Rees and Julien Ponthus)