European Markets Navigate Trade Talks Amid Choppy Waters

European stocks dropped slightly on Monday during volatile trade, although set to log quarterly gains. Key factors included progress in U.S. trade talks and a new U.S.-UK trade deal. Despite optimism, unresolved steel tariffs and sectoral declines, notably in renewable energy, impacted market performance.

European stocks experienced a slight decline in volatile trading on Monday, though still poised for quarterly gains. Investors tracked developments in U.S. trade talks as the July tariff deadline approached.

The pan-European STOXX 600 index fell 0.2% to 542.64 points by 0912 GMT, heading for a monthly drop but a second consecutive quarterly gain. Easing U.S.-China trade tensions bolstered market sentiment, especially as Canada resumed trade discussions with the U.S.

Renewable energy shares took a hit, with Vestas plunging 5.9%. Banking stocks also suffered, led by a 4.1% drop from Deutsche Bank. Meanwhile, Zalando shares rose following positive coverage initiation by Jefferies.

(With inputs from agencies.)