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UPDATE 1-European shares flat after Wall Street tech selloff, Korean tensions

* STOXX 600 flat

* Energy sector gets a boost from oil prices

* AA touches all time low (Adds companies, shares prices)

LONDON, Sept 26 (Reuters) - European shares were flat on Tuesday after a selloff in technology shares on Wall Street and as tensions over Korea persisted, while investors were awaiting further clues on whether U.S. interest rates will rise in December.

Hints on the future trajectory of rates could emerge after market close (1645 GMT) when Federal Reserve Chair Janet Yellen gives a speech on inflation and monetary policy in Ohio.

At 0830 GMT, the pan-European STOXX 600 was flat but within range of its highest level in around two months, as the impact of Pyongyang accusing Washington of declaring war remained somewhat modest.

"Let's hope this all stays cartoon-ish", analysts at Rabobank bank said in a morning note.

Most European bourses and sectors were in negative territory.

Energy stocks outperformed, boosted 0.7 percent by a rise in oil prices that followed a threat by Turkey to cut crude flows from Iraqi Kurdistan. Miners like Glencore and Rio Tinto rose over one percent as investors looked for safe havens.

German drugs and chemicals maker Merck rose 2 percent as UBS initiated coverage with a "buy" rating, saying its ability to grow its Life Science and Performance Materials divisions was not sufficiently taken into account.

Germany's Thyssenkrupp lost 0.75 percent after it raised almost 1.4 billion euros in a share sale to help fund its industrial goods businesses after the planned merger of its steel operations with Tata Steel next year. Its rival, European champion ArcelorMittal, was up 1.4 percent.

Elsewhere on the M&A front, German industrial group Siemens , which may decide on Tuesday to pursue a multibillion-dollar rail merger with rival Alstom was flat and its possible French suitor up 0.2 percent.

Lufthansa and EasyJet, which are seeking to carve up Air Berlin, were up 0.2 percent and 1.6 percent respectively.

Food giant Nestle, under pressure from activist shareholder Third Point, was trading up one percent after setting new margin targets.

Two British stocks posted the worst performance of the STOXX 600. Shares in motoring group AA fell 9.6 percent to an all time low after it announced it would have to raise capital expenditure.

British lender Close Brothers was down 5.9 percent after it warned shareholders that Brexit would have a long-term impact on its customers while wider markets remain "uncertain". (Reporting by Julien Ponthus; Editing by Catherine Evans)