By Shreyashi Sanyal and Agamoni Ghosh
(Reuters) - European shares fell on Thursday, hurt by losses for miners and automakers as doubts grew over the prospect of a trade deal between the United States and China, with weak earnings from oil major Royal Dutch Shell adding to the gloom.
A Bloomberg report said that China is doubtful of a long-term trade deal with U.S. President Donald Trump, raising fresh uncertainty about progress between the two countries after an interim trade deal was almost finalised.
The report dashed optimism earlier in the session sparked by the U.S. Federal Reserve lowering borrowing costs for the third time this year on Wednesday.
The pan-European STOXX 600 index <.STOXX> ended 0.5% lower but logged its second straight monthly gain after an October packed with corporate earnings reports along with some Brexit and trade twists.
"The pain inflicted by the trade war on the U.S. economy may eventually make it more willing to compromise but the question is how much pain is needed for a full deal to be signed," said Timme Spakman, economist, international trade analysis at ING.
Tariff-exposed miners <.SXPP> were down 1.4%, while automakers <.SXAP> lost 1.3%.
However, the biggest decliners were oil and gas producers <.SXEP>, which fell 1.7% after heavyweight Royal Dutch Shell <RDSa.L> slid 4%.
Shell warned uncertain economic conditions could slow its $25 billion share buyback plan. That followed warnings from BP <BP.L> and France's Total <TOTF.PA> earlier this week about lower oil and gas prices hitting margins.
Airlines also posted some disappointing numbers.
Air France-KLM <AIRF.PA> fell 1% after it said slowing travel demand was likely to hurt ticket sales in the remainder of the year, while British Airways owner IAG <ICAG.L> said industrial action by pilots at the airline had knocked third-quarter profits.
In the auto sector, a deal between Fiat Chrysler <FCHA.MI> and Peugeot owner PSA <PEUP.PA> to create the world's fourth-largest automaker lifted the shares of Fiat Chrysler 8.2%.
However, PSA fell about 13%, after having risen nearly 5% in the last three sessions in the run-up to the deal.
Spanish utility Enagas <ENAG.MC> jumped 5.5% after a media report said a Spanish regulator was considering softening proposed cuts to gas grid returns.
(Reporting by Shreyashi Sanyal in Bengaluru; Additional reporting by Agamoni Ghosh; editing by Patrick Graham, Arun Koyyur, Kirsten Donovan)