(Reuters) - European shares fell for a second day running on Tuesday, but a 6% jump in drugmaker Sanofi and a report that U.S. and Chinese officials are planning to delay tariffs set to kick in on Dec. 15 helped them end off session lows.
In a week also packed with other global political and economic events such as an election in Britain and U.S. and European central bank meetings, the pan-regional STOXX 600 index closed down 0.3%, recovering from a fall of up to 1.2% earlier in the day.
The Wall Street Journal reported officials from both the United States and China as saying the groundwork was being laid to push back a Dec. 15 deadline for new tariffs.
“The fact that the deadline might be postponed can be seen as a positive, but equally it does not resolve the situation,” said Simona Gambarini, markets economist at Capital Economics.
“It’s fair to say that everyone expects some sort of a phase one (interim) deal ... With so much positive news already priced in, there is much bigger risk of downside if those expectations are disappointed.”
Signs of progress in Sino-U.S. trade relations were a major catalyst in powering the benchmark index to four-year peaks last month. However, growing fears about delays to a deal have hurt market sentiment, with the STOXX 600 now about 2% below those levels.
Frankfurt's trade-sensitive DAX .GDAXI fell 0.3%, while export-reliant mining .SXPP and autos sectors .SXAP shed around half a percent each.
A 7.4% slide in French car parts maker Valeo (VLOF.PA) after its mid-term targets disappointed investors led losses in the auto sector.
Consumer stocks, including some food and beverage .SX3P makers, and financials .SX7P were among other big decliners.
Defensive plays such as real estate .SX86P, utilities .SX6P and healthcare stocks .SXDP gained. Sanofi (SASY.PA) posted its best day in three years after the firm revamped its margin goals and announced a narrower drug focus.
London's FTSE 100 .FTSE fell 0.3%. Opinion polls have put the ruling Conservatives on course for a parliamentary majority in an election on Thursday, enabling Brexit to go ahead by the end of January.
Ashtead Plc’s (AHT.L) 6.2% slide was the biggest on the index after the equipment rental giant said it was suffering from competitive pressure and market uncertainty in Britain.
Reporting by Medha Singh and Susan Mathew in Bengaluru; Editing Arun Koyyur and Mark Potter