UPDATE 2-European shares end slightly higher as trade worries linger

Reuters

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    * Early gains evaporate, STOXX ends slightly higher
    * Metal and mining companies lead market gains 
    * Banks fall on bets of interest rate cut

 (Updates to close)
    By Sruthi Shankar
    June 13 (Reuters) - Gains for metal and mining companies
helped European stocks end slightly higher on Thursday, with
concerns over an attack on tankers in the Gulf of Oman and
continuing U.S.-China trade tensions sapping early enthusiasm
among investors.
    The pan-European STOXX 600 index  .STOXX  closed 0.16%
higher having earlier climbed nearly half a percent aided by
surge in telecom and oil stocks.
    The basic resources index of commodities-linked companies
 .SXPP  took the lead as the day wore on, climbing 1.7% as
prices of copper and other metals rose.  MET/L  IRONORE/ 
    Italy's FTSE MIB  .FTMIB  and Germany's DAX index  .GDAXI 
outperformed with a 0.8% and 0.4% rise respectively, while
Britain's FTSE 100  .FTSE  was flat.
    The surge in oil prices that had dominated morning trading
after the tanker attacks faded by the close.  O/R 
    Steve Sosnick, chief strategist at Interactive Brokers said
that he was surprised there hadn't a wider market reaction to
the attacks.
    "Outside of the oil sector which is responding positively as
it should, the rest of the sectors that don't rely on oil or
consume oil are shrugging it off," he said. 
    Europe's benchmark index has risen about 3% this month,
reversing roughly half of May's sell-off which was its worst
monthly performance in more than two years.
    The recovery has come largely on expectations that the U.S.
Federal Reserve and European Central Bank will take action to
impede any slowdown in global growth in the wake of the trade
tensions that have plagued markets and major economies over the
past year.
    U.S. President Donald Trump on Wednesday declined to set a
deadline for levying addition tariffs on Chinese goods but
called the relationship with Beijing 'testy'.  urn:newsml:reuters.com:*:nL2N23J0XO
    Trade talks broke down in May and China has not confirmed
there will be any meeting with U.S. leaders on the sidelines of
a G20 summit later this month.
    Soft U.S. inflation data on Wednesday raised the number of
Federal Reserve rate cuts priced in to the money market to three
this year, although some analysts saw that as overdone.
    Banking stocks  .SX7P , which tend to suffer when
expectations for interest rates fall, closed down slightly.
    "What we've seen in the last couple of weeks has been
predicated on investors focused on whether the Fed would resume
rate cutting. If we go in with such a level of certainty and
optimism, the outcome would be potentially disappointing," said
Sosnick.
    The biggest decliner on STOXX 600 was Aurubis AG  NAFG.DE ,
down 8% after Europe's largest copper producer warned on profits
and said its CEO would leave the company immediately.
 urn:newsml:reuters.com:*:nL8N23J59J
    Ferguson Plc  FERG.L  led the STOXX 600, jumping 5.9% after
Activist fund Trian Fund Management LP said it had built up a 6%
stake in the British plumbing products company, days after it
reported disappointing results.  urn:newsml:reuters.com:*:nL4N23K1O2
    Shares of 1&1 Drillisch  DRIG.DE  and parent United Internet
 UTDI.DE , which had boosted the telecoms sector as investors
cheered the results of Germany's 5G spectrum auction, finished
just marginally higher.  urn:newsml:reuters.com:*:nL8N23K1T9

 (additional reporting by Amy Caren Daniel and Medha Singh in
Bengaluru; editing by Patrick Graham and Kirsten Donovan)
 ((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223
8780; outside U.S. +91 80 6749 6328; Reuters Messaging:
sruthi.shankar.reuters.com@reuters.net))

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