A recovery in European shares stalled on Tuesday as uncertainty over a trade dispute between Washington and Beijing kept investors on edge.

The STOXX 600 wavered around parity and by 0825 GMT was down 0.05 per cent, as gains among oil majors on stronger crude prices helped offset a weaker basic materials sector. However, the pan-European index however is still up nearly 1 per cent from the five-month lows hit last week.

“The delay in implementing new tariffs could be tempting some investors to dip their toes back into the water so to speak on a very selective basis,” said CMC analyst Michael Hewson.

After initial gains, Germany's exporter-heavy DAX index fell 0.05 per cent, while strength in the pound on bets of a Brexit deal dragged the UK's FTSE 100 down 0.3 per cent.

US President Donald Trump had said last week he was ready to slap tariffs on virtually all Chinese imports into the United States, threatening duties on another $267 billion of goods on top of $200 billion in imports primed for levies in coming days.

Among single stocks, takeover talk lifted Finnish sports equipment maker Amer Sports by as much as 14 per cent.

Trading in its shares was halted ahead of a statement from Amer saying it had received a non-binding preliminary indication of interest from China's ANTA Sports Products and Asian private equity firm FountainVest Partners.

Ubisoft was another strong gainer, up 4.3 per cent with traders citing a broker upgrade. Solid updates pushed industrial equipment rental firm Ashtead and asset manager Partners Group up 2.6 and 3.4 per cent, respectively.

Steel giant ArcelorMittal led the fallers, down 3 per cent after it raised its bid for India's debt-laden Essar Steel in competition with Russia's VTB and Vedanta Resources.

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