UPDATE 2-Possible tariff delay lifts European shares off session lows

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 the 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 a 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 has hurt market sentiment, with the STOXX 600 now about 2% below those levels.

Frankfurt's trade-sensitive DAX fell 0.3%, while export-reliant mining and autos sectors shed around half a percent each. A 7.4% slide in French car parts maker Valeo after its mid-term targets disappointed investors led losses in the auto sector.

Consumer stocks, including some food and beverage makers, and financials were among other big decliners. Defensive plays such as real estate, utilities, and healthcare stocks gained. Sanofi posted its best day in three years after the firm revamped its margin goals and announced a narrower drug focus.

Sanofi's rally helped overcome losses on the French index, while a rally in utility shares helped Italian stocks outperform, up 0.7%. London's FTSE 100 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 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.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)