European shares end slightly higher as trade worries linger

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

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* Early gains evaporate, STOXX ends slightly higher

* Metal and mining companies lead market gains

By Sruthi Shankar

June 13 (Reuters) - Gains for metal and mining companieshelped European stocks end slightly higher on Thursday, withconcerns over an attack on tankers in the Gulf of Oman andcontinuing U.S.-China trade tensions sapping early enthusiasmamong investors.

The pan-European STOXX 600 index .STOXX closed 0.16%higher having earlier climbed nearly half a percent aided bysurge 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% asprices of copper and other metals rose. MET/LIRONORE/

Italy's FTSE MIB .FTMIB and Germany's DAX index .GDAXI outperformed with a 0.8% and 0.4% rise respectively, whileBritain's FTSE 100 .FTSE was flat.

The surge in oil prices that had dominated morning tradingafter the tanker attacks faded by the close. O/R

Steve Sosnick, chief strategist at Interactive Brokers saidthat he was surprised there hadn't a wider market reaction tothe attacks.

"Outside of the oil sector which is responding positively asit should, the rest of the sectors that don't rely on oil orconsume 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 worstmonthly 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 toimpede any slowdown in global growth in the wake of the tradetensions that have plagued markets and major economies over thepast year.

U.S. President Donald Trump on Wednesday declined to set adeadline for levying addition tariffs on Chinese goods butcalled the relationship with Beijing 'testy'. urn:newsml:reuters.com:*:nL2N23J0XO

Trade talks broke down in May and China has not confirmedthere will be any meeting with U.S. leaders on the sidelines ofa G20 summit later this month.

Soft U.S. inflation data on Wednesday raised the number ofFederal Reserve rate cuts priced in to the money market to threethis year, although some analysts saw that as overdone.

Banking stocks .SX7P , which tend to suffer whenexpectations for interest rates fall, closed down slightly.

"What we've seen in the last couple of weeks has beenpredicated on investors focused on whether the Fed would resumerate cutting. If we go in with such a level of certainty andoptimism, the outcome would be potentially disappointing," saidSosnick.

The biggest decliner on STOXX 600 was Aurubis AGNAFG.DE ,down 8% after Europe's largest copper producer warned on profitsand said its CEO would leave the company immediately. urn:newsml:reuters.com:*:nL8N23J59J

Ferguson PlcFERG.L led the STOXX 600, jumping 5.9% afterActivist fund Trian Fund Management LP said it had built up a 6%stake in the British plumbing products company, days after itreported disappointing results. urn:newsml:reuters.com:*:nL4N23K1O2

Shares of 1&1 DrillischDRIG.DE and parent United InternetUTDI.DE , which had boosted the telecoms sector as investorscheered the results of Germany's 5G spectrum auction, finishedjust marginally higher. urn:newsml:reuters.com:*:nL8N23K1T9 (additional reporting by Amy Caren Daniel and Medha Singh inBengaluru; editing by Patrick Graham and Kirsten Donovan) ((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 2238780; outside U.S. +91 80 6749 6328; Reuters Messaging:sruthi.shankar.reuters.com@reuters.net))

This article appears in: Politics , World Markets , US Markets , Stocks

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