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Europe: Shares steady as trade angst eases

[MILAN] 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 US and Chinese presidents at a G-20 meeting.

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

"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 US tariffs on imported cars could be imposed after the G-20 meeting in Buenos Aires. That weighed on auto stocks, which fell 0.5 per cent.

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German tyre maker Continental declined more than 4 per cent 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 per cent on the year.

Top faller on the Stoxx on Wednesday was Tenaris, down 7.1 per cent after the CEO of Techint, the parent company of Tenaris, was charged by an Argentine federal judge.

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

Telecoms 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 Dutch unit by Deutsche Telekom.

The sector pared some gains to end up 0.1 per cent.

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

REUTERS