Cautious European Markets Eye U.S. Tariff Developments Amid Mixed Sector Performance

European shares remained flat on Monday amid cautious investor sentiment fueled by speculation of U.S. President Trump's softer tariff approach. Despite a rapid growth in Eurozone business activity, European equities dipped slightly. Sector-specific performance varied, with mining stocks rising and food and beverage sectors lagging.

European shares displayed a cautious stance on Monday, closing the day flat as traders speculated on a potentially softer tariff strategy from U.S. President Donald Trump. Despite hopes for relief, the pan-European STOXX 600 edged down 0.1%, following an initial rise attributed to euro zone business activity growing at its fastest rate in seven months.

Investors focused on the likelihood of the Trump administration introducing sector-specific tariffs while planning reciprocal levies for April 2. Analyst Bas van Geffen of Rabobank noted the difficulty in pricing market changes due to potential tariff announcements. This uncertainty contributed to the cautious sentiment in European equities.

While Germany's economic policies aim to boost regional growth and offset the effects of the U.S. trade war, sector performances varied. Mining stocks rose 1.3% on higher copper prices, while food and beverages lagged, dropping 1.4%. Stocks like Vodafone and Bayer faced declines due to downgrades and legal issues, respectively.

(With inputs from agencies.)