European shares flat as trade tensions intensify

European shares were little changed on Monday as investors shrugged off fresh concerns about U.S.-China trade negotiations and looming U.S. tariffs on European imports.

A report on Friday said that the United States might limit Chinese company listings on its stock exchanges, fueling more U.S.-China trade angst ahead of critical negotiations next week. Trade-sensitive technology shares were down 0.2%, after earlier leading declines on the pan-European STOXX 600 index. After falling in early trading, the benchmark European index was up 0.1%.

Equity markets rallied in September on cues of monetary easing from the European Central Bank and the U.S. Federal Reserve, and on hopes of a resolution in an economically damaging U.S.-China trade war.

JPMorgan raised its rating on euro zone equities to “overweight” on Monday, saying the bloc’s battered stocks have been under owned and predicting an opportunity for them to bounce back.

The STOXX 600 index is set to close the month with a 3% rise, marking its third straight quarterly gain. However, the pace of growth has slowed substantially from a 12% increase in the first quarter of the year as concerns linger about the health of the euro zone economy as well as the trade war.

All eyes are now on an announcement by the World Trade Organization (WTO), which is expected to grant the United States a record award allowing it to hit European imports with billions of dollars of tariffs in a longrunning aircraft subsidy dispute.

Asian stock markets, including China’s, were little changed on Monday, shrugging off news that the U.S. administration is considering delisting Chinese companies from U.S. stock exchanges.

MSCI’s broadest index of AsiaPacific shares outside Japan was flat, while China’s Shanghai stock index slipped 0.1%, barely responding to any of the concerns around the latest Sino-U.S. tensions that caused the Nasdaq index to fall more than 1% on Friday.