European stocks closed higher on Monday as manufacturing data in both China and Europe showed slight improvement, though not enough to dampen global fears of slowing economic growth.
The pan-European Stoxx 600 was 0.3% higher at the closing bell, financial services stocks jumping 0.9% to lead gains while technology stocks slipped 0.6%. The U.S. markets were closed for Labor Day.
China and the U.S. kicked off a new round of trade tariffs on one another's imports over the weekend, despite signs that talks could resume in September. The latest round of tariffs sees the U.S. imposing 15% tariffs on a variety of Chinese goods, including footwear, smart watches and flat-panel televisions, while China targeted U.S. crude with 5% duties.
Reuters reported on Monday that China had lodged a complaint against the U.S. with the World Trade Organization.
Back in Europe, PMI (purchasing managers' index) data showed that euro zone manufacturing activity contracted for a seventh month in August as weaker demand weighed on companies. However, the 47.0 figure for the bloc represented a modest improvement on the 46.5 reading for July.
U.K. manufacturing PMI nosedived at its fastest rate in seven years, falling to 47.4 from 48.0 and coming in a full point lower than the median forecast in a Reuters poll of economists.
U.K. lawmakers will bring forward legislation this week seeking to block the possibility of Britain leaving the European Union without a deal. The main opposition Labour party will publish its legislation plan on Tuesday, but the Conservative-led government has so far declined to guarantee it will abide by the new law.
Reports emerged on Monday afternoon that U.K. leader Boris Johnson is assembling an emergency cabinet meeting, with British media speculating that the prime minister is considering seeking an early general election if anti no-deal MPs defeat the government this week. The Sun newspaper reported on Monday that Johnson could call for a vote on an election as early as Wednesday, claiming that sources said the snap election would be held in just five weeks' time.
Sterling dived nearly 0.8% against the dollar on Monday, trading at around $1.2058, while the FTSE 100 climbed 1%.
Shares of Portuguese food retailer Jeronimo Martins climbed 4.2% to top the Stoxx 600 by the end of Monday's session, closely followed by London-listed recruitment firm Hays, which saw its shares gain 4%.
Elsewhere, pharmaceutical giant AstraZeneca's shares hit an all-time high during Monday's session after positive results from a late-stage drug study. Shares of the company were up 3% at the market close.
At the other end of the European blue chip index, Luxembourg-based Grand City Properties fell 4.4%, closely followed by Spanish lender Bankia, which shed 4.3%.