UPDATE 2-European shares break six-day winning streak, focus moves to Fed

  • Reuters
  • Stock Market News
UPDATE 2-European shares break six-day winning streak, focus moves to Fed
Credit: © Reuters.

* Telecoms fall most among major sub-sectors

* BP , Hunting drag oil and gas sector lower

* Fed may cut rates for the third time this year

* Healthcare group Fresenius gains on Q3 revenue beat (Updates market action, adds comment, background)

By Shreyashi Sanyal

Oct 29 (Reuters) - European shares closed lower for the first time in seven sessions on Tuesday, as weak earnings dampened optimism surrounding the U.S.-China trade progress and ahead of an expected interest-rate cut by the U.S. Federal Reserve later this week.

The pan-European STOXX 600 .STOXX fell 0.2% after scaling a 21-month high in the previous session, tracking record gains for Wall Street's S&P 500 index .SPX . .N

"The markets are at new highs in Europe and in the U.S. and that is also something that could be pushing investors to take some profit," said Roland Kaloyan, head of European equity strategy at Société Générale.

Finnish paper firm Stora Enso's STERV.HE slumped 5.1% as its quarterly profit dropped and it warned of global political uncertainties. Mondi MNDI.L and Smurfit Kappa SKG.I also fell following the results. stocks .SXKP lost 1.7%, the most among the major European sub-sectors, hurt by a 2.6% slide in shares of Orange ORAN.PA .

A top executive at France's number one telecoms operator said sales in Spain, the telecoms group's second-biggest market, would remain under pressure from competitors cutting prices in coming months. oil and gas sector .SXEP fell 0.9%, dragged down by British energy firm BP BP.L , which reported a sharp drop in third-quarter profits, hurt by weaker oil prices and lower production. weighing on the sector was British oilfield services firm Hunting HTG.L , down 1%, after the company said it sees annual core profit at the lower end of market expectations as it grapples with a slowdown in the U.S. onshore drilling market.

Financials .SXFP were pulled lower by a 2.4% drop in Deutsche Boerse DB1Gn.DE after the German exchange operator missed its third-quarter profit forecasts. were low going into the European corporate earnings season, but after its three busiest weeks the overall picture has been slightly better than expected with companies pulling off modest beats. .SX7P were dragged lower by shares of Swedbank SWEDa.ST , which fell 3%, after Estonia's financial regulator said it decided to open a misdemeanor case with regard to the Estonian subsidiary of the Swedish lender. positive movers, shares of German healthcare group Fresenius FREG.DE gained nearly 5% to top the STOXX index after beating revenue expectations on strong sales in emerging markets and growth in its dialysis unit. AIR.PA edged 1% higher after Indian budget carrier IndiGo placed an order for 300 A320neo-family jets worth at least $33 billion at recent catalogue prices. WATCH

The catalyst for markets this week is expected to be the Fed meeting where officials are expected to cut interest rates for the third time this year, but focus will be squarely on further clues from the central bank on the policy path ahead. are 90% pricing in a rate cut," said David Madden, analyst at CMC Markets.

"I don't think they'll be leaving the door open for another cut in 2019 or early 2020 because that could just be setting expectations that every time the markets fear a recession, a rate cut is warranted."

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