European shares fell to two-week lows on Tuesday after a sharp rise in oil prices and new profit worries in the telecoms sector, but investors remained positive about the outlook for the upcoming earnings season, Reuters reported. A rating downgrade on the telecoms sector by Dresdner Kleinwort Wasserstein pressured stocks already weakened by last week's shock profit warning by France Telecom. Telecom Italia was one of the biggest decliners on the day, shedding 3.2 percent amid rumours it might also trim its earnings forecasts, although the company denied this. The FTSEurofirst 300 index of Europe's leading shares closed 0.7 percent lower at 1,297.44 points, its lowest level since January 5. But the index remained 1.7 percent higher since the start of the year, and market watchers were optimistic the market could eke out more gains as they expected robust quarterly earnings reports in the coming weeks.
