European shares slip as energy counters weigh

Energy stocks dropped 2% to hit over a two-month low, tracking a 1% fall in as investors worried about ticking up later in the year amid signs of weakening U.S. demand.

Adding to the sector's losses, British oil giant fell 3.3% after ratings agency S&P Global revised the company's 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 's rate verdict on Thursday, where it is expected to ease borrowing costs by 25 basis points.

The recent uptick in the euro zone , 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 Foa, 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 was down 0.4%.

Among other stocks, slid 2.6% after downgraded the German insurer to "neutral" from "buy".

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 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. of the company fell 1.9%.

Meanwhile, global sentiment wavered, with Asian shares retreating on Tuesday as investors awaited India's official election results..