(Updates prices throughout, adds investor comment)

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European stocks turn negative, down 0.5%

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Trump signalled some flexibility on levies

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Also slapped new 25% levy on buyers of Venezuelan oil

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Oil rises as tariff concerns overshadow Black Sea security

deals

By Tom Wilson

LONDON, March 26 (Reuters) - Stocks fell and the U.S.

dollar edged higher on Wednesday, as nervy traders awaited

clarity on President Donald Trump's trade policy ahead of a new

round of tariffs next week.

European stocks turned negative after making slim

gains in early trading, and were last down 0.5%. The healthcare

and autos sectors both fell 1.4%.

Nevertheless, the STOXX 600 remains on track for its best

quarter in two years, buoyed by hopes that a German spending

package could spur growth.

Investors were clinging to hopes of flexibility from the

White House after Trump said on Monday that not all trade levies

would come on the April 2 deadline, and that some countries

would get breaks, without providing details.

At the same time, Trump opened a new front in his trade war

with a directive for 25% secondary tariffs on any country that

buys oil or gas from Venezuela. In turn, oil prices rose,

although the impact was offset by relief from Black Sea maritime

security deals struck by the U.S. in the war in Ukraine.

Meanwhile, the U.S. dollar index, which measures the

currency against a basket of six major peers, inched higher

after slipping 0.1% on Tuesday, its first losing session in

about a week.

The index plumbed a five-month low last week, weighed down

by worries that Trump's trade war could trigger a U.S.

recession. It is set for a drop of 4% this quarter.

Data on Tuesday showed U.S. consumer confidence plunged to

the lowest level in more than four years this month, with

households fearing a recession in the future.

Wall Street was set for a nervy start, too, futures gauges

showed. The S&P 500 had squeezed out a 0.16% gain

on Tuesday.

Investors said markets were on tenterhooks for any signs

that the hit to the global economy from Trump's tariffs would be

less than feared.

"Trump has been sounding a bit more targeted in terms of

tariffs," said Fleura Shiyanova, fundamental analyst at Swiss

asset manager Unigestion. "If we can minimise the amount of

negative news, this could be a potentially positive catalyst."

Brent crude futures extended gains through the

European morning, and were last up 0.9% at $73.64 a barrel. U.S.

West Texas Intermediate crude futures added 0.9% to

$69.62 a barrel.

Earlier, Japan's Nikkei advanced 0.7%, while

mainland Chinese blue chips slipped 0.3%.

BRITISH FOCUS

Elsewhere, the British pound and government bond yields fell

after data showed UK inflation slowed to an annual rate of 2.8%

in February from 3% a month earlier, slightly below market

expectations.

Economists said that inflation remained stubborn, with the

Bank of England set for a gradual easing of interest rates.

"The good news is that today's data should provide the BoE a

path to continue with its gradual dial down of restrictive

policy," said Sanjay Rata, chief UK economist at Deutsche Bank

Research.

British markets are in focus with finance minister Rachel

Reeves set to announce cuts to her spending plans later on

Wednesday in an attempt to show investors that she can be

trusted to fix the public finances as growth falters.

The pound was last down 0.3% versus the dollar at

$1.2904 having traded at $1.2940 before the inflation data. It

weakened against the euro, too, with the common currency last up

0.3% at 83.65 pence.