European shares steady as trade angst eases

MILAN/LONDON (Reuters) - European shares steadied on Wednesday as trade war fears which had pushed indexes into the red during the previous session eased on the prospect of a meeting between the U.S. and Chinese presidents at a G20 meeting.

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, November 27, 2018. REUTERS/Staff

The pan-European STOXX 600 .STOXX benchmark index rose as much as 0.5 percent before ending flat on the day at 357 points, while the Euro STOXX 50 index .STOXX50E added 0.1 percent.

“The meeting between Presidents Trump and Xi is an opportunity to avoid further escalation. We expect the two to do no more than agree to a framework for talks,” UBS economist Seth Carpenter wrote in a note.

Uncertainty however prevailed after a German news report said new U.S. tariffs on imported cars could be imposed after the G20 meeting in Buenos Aires. That weighed on auto stocks .SXAP, which fell 0.5 percent.

German tire maker Continental CONG.DE declined more than 4 percent with traders mentioning a "cautious tone" from the company during a conference.

Worries over Washington’s protectionist policies and slowing growth are expected to keep investors on the edge throughout 2019, a Reuters poll showed, with the STOXX seen hitting 373 points, up just 2.2 percent on the year.

Top faller on the STOXX on Wednesday was Tenaris TENR.MI, down 7.1 percent after the CEO of Techint, the parent company of Tenaris, was charged by an Argentine federal judge.

France's Danone DANO.PA fell 1.5 percent after Goldman Sachs cut its rating to "sell", saying it believed the consensus and the company's guidance were optimistic.

Telecoms .SXKP hit their highest level since mid-May on hopes of sector consolidation sparked by the European Commission's unconditional clearance of the acquisition of Tele2's TEL2b.ST Dutch unit by Deutsche Telekom DTEGn.DE.

The sector pared some gains to end up 0.1 percent.

“Deals speculations may start gaining pace again. However ... ‘unconditional’ deals for the UK and Spain are unlikely to materialize since in-market consolidation in both countries face a higher antitrust hurdle,” said Societe Generale analyst Ottavio Adorisio in note to clients.

Editing by Robin Pomeroy