UPDATE 1-European shares dip on rate, trade worries

* Trade war, U.S. rates worry investors

* STOXX 600 down 0.1 pct

* Markets shrug off banking stress tests

* Goldman Sachs (NYSE: GS ) note weighs on Italian lenders (Adds closing prices)

By Julien Ponthus

LONDON, Nov 5 (Reuters) - European shares eased on Monday as last week's rebound ran out of steam on investor nervousness over fast-rising U.S. interest rates and Washington's trade dispute with Beijing.

The pan-European STOXX 600 .STOXX benchmark index fell 0.1 percent with most country indexes also hovering around neutral.

Tuesday's U.S. mid-term elections also kept traders cautious, as did uncertainty over whether renewed hopes of a breakthrough in Brexit negotiations were misplaced.

Results from the European banking stress tests had little impact, with the sector .SX7P ending down 0.4 percent.

"The results provide no surprises and we expect little market reaction," Jefferies analysts wrote.

Britain's Barclays BARC.L and France's Societe Generale SOGN.PA were among unexpected laggards in the health check but their shares were muted, ending down 0.5 percent and up 0.3 percent respectively.

The Italian banking index .FTIT8300 lost 1.6 percent, however, after Goldman Sachs downgraded BPER EMII.MI and Intesa Sanpaolo ISP.MI to "sell". Their shares fell 3.4 percent and 1.5 percent respectively.

Lloyd's of London underwriter Hiscox HSX.L fell 5.7 percent after warning that growth could moderate over the rest of the year.

Telenet TNET.BR lost 5.4 percent after a rating downgrade from Bank of America (NYSE: BAC ) Merrill Lynch.

Top faller on the STOXX 600 was Grenke GLJn.DE , which dropped 9 percent after the company said it may not be able to sustain growth rates in its core leasing business. company later delayed the placement of a five-year bond.

Among positive trading updates was Dutch oil and gas storage firm Vopak VOPA.AS , up 5 percent, and Siemens (NS: SIEM ) Healthineers SHLG.DE , which rose 2.8 percent after forecasting higher earnings for next year.

French payments group Ingenico INGC.PA , which has attracted bid interest from banking company Natixis CNAT.PA , jumped 3.9 percent after it named a new chief executive on Monday, on hopes that a new board could strike a deal.

Britain's Micro Focus MCRO.L was up 2 percent after it said it expected full-year revenue to come in towards the higher end of a weak outlook and announced the departure of its finance director for ITV (LON: ITV ) after less than 12 months.