UPDATE 2-European shares break six-day winning streak, focus moves to Fed

* Telecoms fall most among major sub-sectors
* BP , Hunting drag oil and gas sector lower
* Fed may cut rates for the third time this year
* Healthcare group Fresenius gains on Q3 revenue beat

(Updates market action, adds comment, background)
By Shreyashi Sanyal
Oct 29 (Reuters) - European shares closed lower for the
first time in seven sessions on Tuesday, as weak earnings
dampened optimism surrounding the U.S.-China trade progress and
ahead of an expected interest-rate cut by the U.S. Federal
Reserve later this week.
The pan-European STOXX 600 .STOXX fell 0.2% after scaling
a 21-month high in the previous session, tracking record gains
for Wall Street's S&P 500 index .SPX . .N
"The markets are at new highs in Europe and in the U.S. and
that is also something that could be pushing investors to take
some profit," said Roland Kaloyan, head of European equity
strategy at Société Générale.
Finnish paper firm Stora Enso's STERV.HE slumped 5.1% as
its quarterly profit dropped and it warned of global political
uncertainties. Peers Mondi MNDI.L and Smurfit Kappa SKG.I also fell
following the results.
Telecom stocks .SXKP lost 1.7%, the most among the major
European sub-sectors, hurt by a 2.6% slide in shares of Orange
ORAN.PA .
A top executive at France's number one telecoms operator
said sales in Spain, the telecoms group's second-biggest market,
would remain under pressure from competitors cutting prices in
coming months. The oil and gas sector .SXEP fell 0.9%, dragged down by
British energy firm BP BP.L , which reported a sharp drop in
third-quarter profits, hurt by weaker oil prices and lower
production. Also weighing on the sector was British oilfield services
firm Hunting HTG.L , down 1%, after the company said it sees
annual core profit at the lower end of market expectations as it
grapples with a slowdown in the U.S. onshore drilling market.
Financials .SXFP were pulled lower by a 2.4% drop in
Deutsche Boerse DB1Gn.DE after the German exchange operator
missed its third-quarter profit forecasts.
Expectations were low going into the European corporate
earnings season, but after its three busiest weeks the overall
picture has been slightly better than expected with companies
pulling off modest beats.
Banks .SX7P were dragged lower by shares of Swedbank
SWEDa.ST , which fell 3%, after Estonia's financial regulator
said it decided to open a misdemeanor case with regard to the
Estonian subsidiary of the Swedish lender. Among positive movers, shares of German healthcare group
Fresenius FREG.DE gained nearly 5% to top the STOXX index
after beating revenue expectations on strong sales in emerging
markets and growth in its dialysis unit. Airbus AIR.PA edged 1% higher after Indian budget carrier
IndiGo placed an order for 300 A320neo-family jets worth at
least $33 billion at recent catalogue prices. WATCH
The catalyst for markets this week is expected to be the Fed
meeting where officials are expected to cut interest rates for
the third time this year, but focus will be squarely on further
clues from the central bank on the policy path
ahead. "Markets are 90% pricing in a rate cut," said David
Madden, analyst at CMC Markets.
"I don't think they'll be leaving the door open for another
cut in 2019 or early 2020 because that could just be setting
expectations that every time the markets fear a recession, a
rate cut is warranted."