European shares were flat on Monday as investors took a breather after a week of high volatility due to uncertainties around U.S. tariffs.
The pan-European STOXX 600 was up 0.07% as of 0810 GMT, after the benchmark index snapped a 10-session winning streak on Friday as frequent shifts in U.S. trade policy triggered a risk-off sentiment.
On the day, the index of chemical firms led the gains, adding 1%.
Defence stocks, which have lately been on a tear due to Germany's higher spending plans, rose 0.8%. Shares of Rheinmetall and Renk rose 3% and 4.4%, respectively.
Berenberg forecast a $686 billion rise in Europe's defence budgets by 2035, which will drive medium-term earnings growth for the region's defence stocks at a level "incomparable" with the past 30 years.
European banks fell 0.7%, limiting overall gains.
Investors remained concerned about an escalating global trade war and its potential impact on the U.S. economy, with doubts brewing over whether the world's top economy could slip into a recession.
Assura climbed 14.1% after the British healthcare real estate investment trust received an indicative, non-binding 1.61 billion pound ($2.08 billion) proposal from KKR and Stonepeak Partners.
(Reporting by Nikhil Sharma; Editing by Mrigank Dhaniwala)
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