(Reuters) – European shares closed slightly higher on Monday as growth-sensitive cyclical stocks got a boost from improving economic data out of China, but renewed U.S.-China tensions hit technology shares.

With trading volumes dwindling as traders leave for summer holidays, the broader European STOXX 600 index held to tight ranges, ending the session 0.3% higher. The benchmark saw trading volume down to nearly 75% of its 30-day moving average.

Data showed China’s factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed back towards pre-coronavirus levels, lifting hopes of an economic rebound in the world’s second-largest economy.

Energy majors BP (BP.L), Royal Dutch Shell (RDSa.L) and Total (TOTF.PA) rose between 1.3% and 3% as crude oil prices rose. [O/R]

Banking sector stocks .SX7P rose 2.0%, leading sectoral gains, while the travel & leisure index .SXTP, which has dealt a heavy blow in the wake of the health crisis, rose 0.9%.

Carnival Plc (CCL.L) jumped 9.3% as it planned to resume AIDA Cruises sailing operations from German ports at the start of September.

However, equity analysts at JPMorgan Cazenove argued they do not a see a case for a sustained rally in the cyclical stocks.

“For Cyclicals and Value to work from here, one needs to see a continued acceleration in the PMIs. We think this is unlikely,” JPMorgan’s Mislav Matejka wrote to clients.

Technology stocks .SX8P, which have outperformed this year in Europe, slid 1.5% on worries over the heightening U.S-China rift ahead of scheduled talks on Aug. 15 to review the trade agreement signed in January.

Dutch tech investor Prosus (PRX.AS) slid for a third day running as the United States prepares ban on two popular Chinese apps, WeChat and TikTok.

Investors were also monitoring the negotiations between White House officials and Democrats over a fifth bill to address the economic impact of the coronavirus pandemic.

U.S. President Donald Trump on Saturday signed executive orders and memorandums aimed at unemployment benefits, evictions, student loans and payroll taxes until the more concrete stimulus bill could be passed.

Among other individual movers, Norwegian energy firm Equinor (EQNR.OL) rose 1.4% after it appointed a company executive Anders Opedal as chief executive officer.

In Britain, fashion retailer Superdry (SDRY.L) jumped 18.7% after agreeing a new 70 million pounds ($91.5 million) lending facility, while AA (AAAA.L) also surged after Sky News reported that Apollo Global Management (APO.N) was weighing a 3 billion pound takeover bid for the roadside recovery group.

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