European shares take a pause, focus turns to earnings

European shares retreated from a near two-year high on Tuesday as investors parsed through a mixed bag of earnings, with optimism surrounding the U.S.-China trade progress and Brexit keeping losses in check.

The pan-European STOXX 600 fell 0.2% at 0813 GMT after scaling a 21-month high in the previous session, boosted by trade optimism and tracking gains on Wall Street, where the S&P 500 hit a record high. The oil and gas sector fell 0.5%, dragged down by British energy firm BP, which reported a sharp drop in third-quarter profits, hurt by weaker oil prices and lower production.

Another set of disappointing numbers came from paper firm Stora Enso, down 7%, dragging down peers Mondi and Smurfit Kappa, after reporting a drop in quarterly profit and warning about global political uncertainties. On the other hand, shares of German healthcare group Fresenius gained 3% to top the STOXX index after beating revenue expectations on strong sales in emerging markets and growth in its dialysis unit.

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