European markets closed slightly lower on Monday as optimism over the path of U.S. tariffs faded.

Concluding a choppy session, the pan-European Stoxx 600 ended 0.13% lower, with Germany's DAX down 0.17%, France's CAC 40 down 0.26%, and the U.K.'s FTSE 100 down 0.1%.

The travel and leisure sector was up 0.55% after London's Heathrow Airport reopened on Saturday following a power outage caused by a fire at a nearby electrical substation that disrupted Friday service. British Airways owner IAG was up 0.8%.

Swedish defense firm Saab gained 4.5% after UBS upgraded its stock from neutral to buy, saying the company is "well-positioned for the defence spending upside."
Global investors in the region are looking ahead to U.S. President Donald Trump's April 2 tariff deadline.

U.S. stocks made strong gains in early Monday deals. The three major U.S. averages closed higher on Friday, having rallied after Trump told reporters that there could potentially be "flexibility" for his reciprocal tariff plan.

The Wall Street Journal over the weekend reported the tariffs are expected to be narrower in scope and will likely exclude some industry-specific duties, citing an administration official.

On Monday, Trump announced that the U.S. will impose 25% tariffs on countries that buy oil and gas from Venezuela, with oil prices trading higher.

The president also told reporters at the White House that tariffs on automobiles, aluminum and pharmaceuticals would be announced soon, according to Reuters reporting.
European stocks ended Monday's session narrowly in the red, with the regional Stoxx 600
down 0.13%.

The index closed 0.56% higher last week after two weeks of losses, but is currently on course for its first monthly decline of the year. The Stoxx 600 has nonetheless continued to outperform the U.S. S&P 500, which is down nearly 5% in March.
UK stocks hold slight gains after services sector activity improves
London's FTSE 250
index was 0.15% higher while the FTSE 100
was just above the flatline in late trade amid broader European stock market declines, after U.K. service sector activity was shown to have improved in March.

The Purchasing Managers' Index published by S&P Global earlier in the session showed output in Britain's dominant services sector rose to a six-month high, with a reading of 52, up from 50.5 in February.

However, the smaller manufacturing sector moved deeper into contraction territory.The readings come ahead of the government's spring fiscal statement on Wednesday, expected to contain announcements on spending cuts to the benefits system and the civil service, as well as an updated assessment of the U.K. economy from the independent Office for Budget Responsibility.

"An upturn in business activity in March brings some good news for the government ahead of the Chancellor's Spring Statement, offering a respite from the recent flow of predominantly downbeat economic data. However... one good PMI doesn't signal a recovery," Chris Williamson, chief business economist at S&P Global Market Intelligence, said in a statement.

While business activity improvements are being driven by areas such as financial services, consumer-facing businesses and manufacturers are struggling with challenges including increased costs, low confidence and weak demand, exacerbated by global uncertainty from U.S. President Donald Trump's tariff policies, Williamson added.

Source: CNBC