(repeats from overnight, no changes to text)
** Domestically focused defensive names most likely stocksto outperform if devaluation of the Chinese yuan continues tohit European equities
** All sectors on Stoxx 600 in the red onWednesday, with autos, and luxury and miners leading the fallersfor a second day
** Defensive sectors also weaker but outperform the index;traders say falls could be an opportunity to pick up nameslikely to be relatively strong in a risk-off market
** Citi highlights UK property stocks as likelybeneficiaries from any capital flight from China, as well asbeing helped by the BoE delaying a rate hike should Chinacontinue to export deflation
** On an index level, Stoxx 600 Telecoms sector looking to break out against the Stoxx 600 - benefits from agreater domestic focus along with additional support frompotential M&A. Chart: http://link.reuters.com/xef45w
** Utilities, the other sector outperforming on the day,less likely to show leadership given its relatively weakeroutlook (second worst sector YTD)
** Italy v Germany pair trade - a proxy on domestic vexporting businesses - also making 10 month highs on a relativebasis Chart: http://link.reuters.com/kuv44w (RM: alasdair.pal.thomsonreuters.com@reuters.net)
