European shares fall as BASF profit warning hits German stocks

European shares opened lower on Tuesday in what could be their third straight day of losses as German shares fell sharply due to a profit warning from chemicals giant BASF.

Amid dimming hopes of a sharp cut in U.S. interest rates this month that has been weighing on riskier assets since late last week, the pan-European STOXX 600 index fell 0.4% by 0714 GMT, in line with Asian peers and Wall Street overnight. German shares tumbled 0.8%.

In the latest evidence of the U.S.-China trade war squeezing businesses, German chemicals firm BASF slumped 5.3% on warning that profit would fall below forecasts for the second quarter and the full year. This hit fellow chemicals company Bayer, which fell 1%, taking Europe's chemicals index down 1.7%.

Nordic lender Danske Bank, which has been struggling to restore trust among investors after disclosing a major money laundering scandal at one of its branches, cut its 2019 earnings forecast for the second time, sending its shares 2.5% lower. Deutsche Bank fell 1.6%, adding to Monday's 5.4% slide as it began to slash 18,000 jobs in a 7.4 billion euro ($8.3 billion) "reinvention" that will lead to yet another annual loss.