By Shreyashi Sanyal
(Reuters) - European shares fell slightly on Tuesday, a day after hitting their highest levels since 2015, with a sales warning from Danish jewelry maker Pandora and a glum forecast from wind energy company Siemens Gamesa weighing on the benchmark index.
The pan-European STOXX 600 index (STOXX) fell 0.03%, although declines were capped by hopes that a U.S.-China trade deal could be signed this month.
Healthcare (SXDP), utilities (SX6P) and real estate (SX86P) stocks, commonly considered defensives, recorded some of the biggest losses in early trading.
"There is still optimism around U.S.-China trade this morning, which is why we are seeing the rotation out of defensive sectors," said Hubert de Barochez, markets economist at Capital Economics.
"But investors still want to see something concrete out of these discussions, even after the positive developments so far."
The telecoms index (SXKP) fell 0.5%, the most among the major European sub-sectors, dragged down by a 1.6% fall in shares of Spanish telecoms group Telefonica (MC:TEF) after it posted quarterly profit below analysts' forecast.
A strong start to the European earnings season and hopes of a resolution in the economically damaging trade war have helped European shares log a strong start to the month, with the STOXX 600 now inching closer to a record high hit in April 2015.
More than half of European companies have already reported results, with most of them beating significantly lowered analysts' estimates.
But on Tuesday, Pandora (CO:PNDORA) fell 12% and was on track for its worst day in more than a year as it warned of a steeper-than-expected fall in sales this year. The stock pulled the wider country index (OMXC20) down 0.7%.
German-Spanish company Siemens Gamesa (MC:SGREN) tumbled 10.3% to its lowest level since January after lowering its forecast for 2020.
In a bright spot, the chemicals sector (SX4P) rose 0.5% after strong earnings reports by Dutch specialty chemicals company DSM (AS:DSMN) and German chemicals group Evonik Industries (DE:EVKn).
Tariff-hit miners (SXPP) rose after reports that China was pushing U.S. President Donald Trump to rollback more tariffs imposed in September as part of a "phase one" trade deal.