- Energy shares hit over two-month lows, biggest drag
- Maersk gains on annual profit forecast lift
- German unemployment rises more-than-expected
June 4 (Reuters) - European shares slipped on Tuesday as weakness in crude prices dragged energy stocks, while investors refrained from placing huge bets before the European Central Bank's interest rate decision later this week.
The continent-wide STOXX 600 was down 0.4% by 0810 GMT, snapping a three-day winning streak.
Energy stocks dropped 2% to hit over a two-month low, tracking a 1% fall in oil prices as investors worried about supply ticking up later in the year amid signs of weakening U.S. demand.
Adding to the sector's losses, British oil giant BP fell 3.3% after ratings agency S&P Global revised the company's credit outlook lower.
France's CAC 40 also lost 0.4%, while London's FTSE 100 shed 0.6%.
A risk-off mood also set in as market participants awaited the ECB's rate verdict on Thursday, where it is expected to ease borrowing costs by 25 basis points.
The recent uptick in the euro zone inflation data, however, has cast doubt on further monetary easing prospects this year.
"We believe the ECB will revise their quarterly inflation projections higher, creating an awkward backdrop for the cut," said Gabriele Foà, portfolio manager at Algebris Investments
"As things stand, we believe an ECB cut this week may soon be viewed as a policy mistake."
On the data front, the number of people out of work in Germany rose more than expected in May. The DAX 40 index was down 0.4%.
Among other stocks, Allianz slid 2.6% after Citigroup downgraded the German insurer to "neutral" from "buy".
Maersk gained 2.2% as the Danish shipping group raised its full-year profit guidance on the back of strong container market demand.
British American Tobacco fell 1.5% after it said it expects a small decline in revenue and profit in the first half of the year but still sees earnings meeting guidance.
Deutsche Telekom said it will raise its buyback volume after German state lender KfW announced a 2.7 billion euro stake sale on Monday. Shares of the company fell 1.9%.
Meanwhile, global sentiment wavered, with Asian shares retreating on Tuesday as investors awaited India's official election results. .
Reporting by Shristi Achar A in Bengaluru; Editing by Mrigank Dhaniwala and Sohini Goswami
Source: Reuters