European stocks closed mainly higher on Monday, with market focus attuned to developments in the U.S.-China trade war.
The pan-European Stoxx 600 was 0.3% higher at the closing bell, with construction and material stocks gaining more than 1% while basic resources shed 0.25% to lead losses.
Reports last week suggested that the White House was considering radical new financial pressure tactics on Beijing, such as delisting Chinese stocks in the U.S. and limiting government pension funds' investments in the Chinese market.
Following the reports, Chinese officials said on Sunday that they were speeding up efforts to open China's financial markets and encourage foreign flows into the country.
Treasury spokeswoman Monica Crowley then told Bloomberg on Saturday that the administration had no plans to impose restrictions at this time, before White House trade advisor Peter Navarro claimed in an interview with CNBC on Monday that the reports were "fake news."
High-level trade officials from the U.S. and China are expected to hold a fresh round of talks early next month.
The world's two largest economies have imposed tariffs on billions of dollars' worth of one another's goods since the start of 2018, battering financial markets and souring business and consumer sentiment.
Stocks on Wall Street traded higher on Monday as investors awaited further developments in the Sino-U.S. trade conflict.
Back in Europe, British Prime Minister Boris Johnson said Sunday that he would not step down even if he fails to secure a deal to leave the European Union. He also insisted that only his ruling Conservative government can deliver Brexit on October 31.
Data released on Monday showed that the euro zone's jobless rate fell to its lowest level in more than 11 years during August, raising hopes that the bloc can avoid a recession. The EU's statistics agency said on Monday that the unemployment rate fell to 7.4% from 7.5% in July, hitting its lowest since May 2008.
A final estimate of U.K. second-quarter GDP (gross domestic product) showed the British economy contracting by 0.2%, but the news failed to shake the pound, which edged around 0.2% higher against the dollar to trade at around $1.2311.
In terms of individual stocks, Imperial Brands gained 3.5% to top the Stoxx 600 on Monday. Shares of the company suffered losses last week after the firm warned it would be hit by the U.S. clampdown on vaping.
Rival British American Tobacco also saw gains, with shares up 2% at the end of the session, while Finnish pulp and paper supplier Valmet Corp also gained around 2%.
At the other end of the European blue-chip index, shares of German automotive parts supplier Hella fell 6%.