European shares flat as Vodafone's fall offsets gains in utilities

European shares were nearly flat on Tuesday as a sharp decline in British telecom group Vodafone, after it slashed its full-year forecasts, eclipsed gains in the utilities sector.

The continent-wide STOXX 600 index dipped 0.05% by 0950 GMT, trading within just a two point range since the opening bell.

The utilities index was up 1.0%. Leading the sectoral advance was UK-based renewable energy generator Drax Group with 4.2% gains, while British Gas owner Centrica rose 4.1% after it launched a share buyback programme.

Weighing the most on the STOXX 600 index was a 6.9% slide in Vodafone shares after the company cut its full-year free cash flow forecast and said annual earnings would come in the bottom range of its target.

European telecoms were down 0.8%.

Moves in European stock markets were tepid, with analysts pointing to uncertainty ahead of the release of U.S. producer prices data for October later in the day and comments from more Federal Reserve officials dampening hopes of a pivot in U.S. monetary policy.

Fed Vice Chair Lael Brainard said on Monday the U.S. central bank will likely soon slow its rate hikes, but emphasized that "we have additional work to do," taking a similar tone to Fed governor Christopher Waller.

There are expectations of more Fed speakers backing the same view of smaller hikes for a longer duration, said Chris Beauchamp, chief market analyst at IG Group.

The STOXX 600 still hovered near 11-week highs, but is still down 11.3% for the year as euro zone data continues to paint a grim picture of the economy.

Latest data showed a flash estimate for euro zone gross domestic product grew inline with expectations in the July-September period. Separately, German investor sentiment rose again in November on hopes that inflation rates will fall soon.

Investors also awaited the UK budget on Nov. 17, with expectations of tax increases and spending cuts - aimed at closing a 50 billion-pound hole in Britain's finances.

"Expectations are fairly gloomy but I think you'll have a government statement that's very cautious and designed to restore market confidence and will lay out a fairly rocky path for the UK," Beauchamp.

London's FTSE 100 index was flat, while the midcap FTSE 250 index dipped 0.2%.

Danish medical device maker Ambu tumbled 12.6% to the bottom on the STOXX 600 after a cautious 2022/23 outlook.