European shares end flat amid investor caution over tariff uncertainties

FRANKFURT: European shares ended flat on Monday as caution prevailed, even as hopes grew that US President Donald Trump could opt for a softer approach with his tariff policies in the coming weeks.

The pan-European STOXX 600 closed 0.1% lower, erasing earlier gains following the release of data that showed euro zone business activity grew at its fastest pace in seven months in March.

The global trade conflict kept the spotlight, with investors assessing a report that Trump’s administration is likely to exclude a set of sector-specific tariffs while applying reciprocal levies on April 2.

“It is very hard now to classify exactly what is priced and what isn’t, simply because it changes every day,” said Bas van Geffen, quantitative analyst at Rabobank.

“People are very cautious about just how much is going to be announced (on April 2). So, that is also leading to some passive or more cautious tone in European equities over today.”

The STOXX 600 index climbed last week after two consecutive weekly losses as Germany gave the final green light to a massive surge in borrowing to spur growth in the region’s largest economy.

Germany’s fiscal boost, along with Trump’s trade war on multiple fronts has prompted economists to rein in their US growth forecasts, making European equities more attractive.

The STOXX 600 has risen 8.2% this year compared with a 2.1% drop in the US benchmark S&P 500 index. Germany’s benchmark index outperformed most of its regional peers with its 15% rise in 2025.

Mining stocks led gains among sectors on Monday, firming 1.3% on higher copper prices. J.P.Morgan also double upgraded the European mining sector to “overweight” from “underweight”.

On the flipside, the food and beverages was the biggest laggard on the main index and fell 1.4%.

Telecommunications lost over 1%, dragged by a 4.4% decline in Vodafone after BofA Global Research downgraded the mobile group’s stock to “neutral” from “buy”.