By Sruthi Shankar and Ambar Warrick

(Reuters) – European stocks closed flat on Tuesday as a billion-dollar German real estate deal and a rally in tech stocks were offset by losses in major mining stocks amid concerns in Chinese markets.

The pan-European STOXX 600 index ended largely unchanged at 445.20 points, after hitting a record 447.15 earlier today.

Germany’s DAX rose 0.2%, after hitting a record earlier in the day on learning that Europe’s largest residential real estate group, Vonovia SE, had agreed to take over rival Deutsche Wohnen for around € 18 billion. ($ 22 billion).

Deutsche Wohnen jumped 15.7%, the most on the STOXX 600, while Vonovia fell 6.1%. Europe’s broad real estate index rose 0.4%, briefly touching a one-year high.

Tech stocks rebounded 1.3% after their Wall Street peers surged overnight on new insistence by U.S. Federal Reserve officials on maintaining loose policy.

Fading inflation fears saw eurozone government bond yields decline for the third day in a row. [US/]

“In recent days, bond yields have fallen slightly and this has allowed the equity markets to breathe again,” said Roland Kayolan, European equity strategist at Societe Generale.

“We are still in a phase of gradual reopening of economies in Europe and we should see better leading indicators in the coming months.”

Miners lagged behind their European peers with a loss of 1.7%, as China said it would tighten price controls on key commodities after warning against hoarding and speculation for curb a meteoric recovery in industrial product prices.

Investors weighed in on data that showed the German economy shrank more than expected in the first quarter against improving corporate morale in May, with companies becoming more optimistic in light of the decline in coronavirus infections and milestones towards reopening.

The European STOXX 600 is up around 12% so far this year, largely in line with Wall Street’s S&P 500, as reopening optimism has lifted shares in economically sensitive sectors such as financials and energy.

HeidelbergCement AG gained 0.2% after US building materials supplier Martin Marietta Materials said it would buy the German company’s assets in California and Arizona for $ 2.3 billion.

UK rail operator Trainline fell 8.3%, the most on the STOXX 600, after Stifel downgraded the stock, citing uncertainty surrounding the company’s operations after the UK government formed a new operator train last week.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Uttaresh.V, Arun Koyyur and Gareth Jones)