Stoxx 600, DAX, CAC, FTSEnomadictrails

LONDON — European stocks closed preliminarily higher on Monday, with mining stocks rebounding as traders kept a close eye on a new trade dispute brewing between the U.S. and China.

The pan-European Stoxx 600 ended 0.4% up, led by the Stoxx 600 Basic Materials Index which climbed 3%, rebounding from a sharp fall on Friday.

Many of the continent’s indexes were in positive territory at the end of the session. The U.K.’s FTSE index was last seen almost 0.2% higher, with Germany’s DAX up around 0.6%, Italy’s FTSE MIB up 0.4%, and France’s CAC 40 edging up 0.2% despite continued political chaos in the country.

Mining stocks made gains, as Fresnillo advanced 9% by the session’s end, Aurubis rose 2.4% and Anglo American added over 4.1%, after U.S. President Donald Trump threatened China with a fresh wave of tariff increases to “financially counter” new export controls that China imposed on rare earth minerals.

China controls about 70% of the global supply of rare earths minerals, which are critical for high-tech industries, including automobiles, defense and semiconductors.

Trump on Sunday appeared to suggest in a Truth Social post that he might not follow through on his threat, however, posting that trade relations with China “will all be fine.”

Netherlands-headquartered semiconductor maker ASML settled 3.7% higher after the Dutch government took control of Nexperia, a subsidiary of China’s Wingtech Technology, in a bid aimed at securing sufficient supplies of chips in Europe as trade tensions resurface.

Meanwhile, Lloyds Bank closed up 0.9% after the U.K. bank said Monday it was setting aside an additional £800 million ($1.07 billion) for compensation arising from the car finance misselling scandal. The bank — whose Black Horse subsidiary is the U.K.’s largest auto finance – has already earmarked 1.2 billion pounds for redress payments.

European autos ended mixed. Ferrari sat at the bottom of the list, having shed 4.1% during the session, amid news last week that its long-term profitability targets fell short of expectations.

However, Renault ended 0.1% higher, Mercedes-Benz saw an increase of almost 0.5%, and Stellantis rose nearly 2.7%. The companies are among five major global carmakers facing legal action at the High Court in London over allegations they tried to cheat diesel emissions limits during tests using so-called ‘defeat devices.’

Elsewhere, AstraZeneca ended the session in negative territory, down 0.5%, after the British drugmaker reached a pricing deal with the U.S. government late Friday which would see it reduce prices in exchange for avoiding tariffs.

In France, Prime Minister Sebastien Lecornu, who was reappointed on Friday after resigning Oct. 6, unveiled his new government, with Roland Lescure named finance minister. The government will attempt to present a fresh budget plans later Monday ahead of President Emmanuel Macron’s deadline. At the end of the trading session in London, budget plans had not been announced.

On Sunday, China said “we are not afraid of” a trade war with the U.S. and a spokesperson for the Ministry of Commerce accused it of a “double standard” with Trump’s promise on Friday to tack on additional 100% tariffs on Chinese imports.

Asia-Pacific markets fell overnight, as investors kept an eye out for any fallout from the renewed China-U.S. trade tensions. Meanwhile, U.S. stocks surged on Monday, rebounding from Friday’s sell-off after Trump’s attempt to reassure markets that there wouldn’t be a new trade war.

There are no major earnings or data releases on Monday but we’ll have the latest financial reports from the likes of ASML, LVMH and Nestle this week as third-quarter earnings season begins.

Investors will also be watching for news from the IMF and World Bank annual meeting in Washington this week.

— CNBC’s Dan Mangan and Victor Loh contributed to this market report.