European shares fell on Tuesday, dragged down by financials and energy stocks, as strong U.S. services activity data spurred fears that the Federal Reserve could stick to its aggressive rate hike approach.
The region-wide STOXX 600 index slipped 0.1%, extending losses to a third straight session.
The index has logged seven straight weekly gains on hopes that signs of cooling inflation would allow the Fed to slow the pace of its rapid interest rate hikes.
However, a report on Monday showing an unexpected pick up in U.S. services industry activity in November, along with solid labour data last week, has provided further evidence of economic resilience and dented sentiment.
Energy stocks fell 0.7%, while banks slid 0.6%. However, losses were countered by gains in consumer staples such as Nestle and Unilever Plc.
Among individual stocks, Aeroports de Paris (ADP) said Royal Schiphol Group has sold off its remaining stake in the French airports company. Shares of ADP fell 13.3%. (Reporting by Amruta Khandekar; editing by Uttaresh.V)