European shares retreated on Tuesday, with falling commodities prices and disappointing updates from Standard Chartered and BHP Billiton putting pressure on the market.

Standard Chartered fell 5 per cent after the emerging markets-focused bank reported an 84 per cent fall in profits as weaker global financial markets, tumbling commodity prices and rising loan impairments hammered revenues.

Shares in miner BHP Billiton dropped 3 per cent after it slashed its interim dividend by 75 per cent, abandoning a long-held policy of steady or higher payouts, and reporting a six-month net loss of $5.67 billion, its first in more than 16 years.

"The dividend at BHP Billiton had looked in doubt for some time," Steve Clayton, head of equity research at Hargreaves Lansdown, said.

The pan-European FTSEurofirst 300 index was down 0.3 per cent by 0852 GMT. The index had closed 1.7 per cent higher on Monday after hitting a two-week high. It is down nearly 10 per cent so far this year.

Miners were the biggest sectoral decliners, with the STOXX Europe 600 Basic Resources index falling 1.6 per cent, hit by BHP and weaker metals prices.

Shares in Antofagasta, Anglo American, Rio Tinto and Glencore fell between 1.9 per cent and 3.2 per cent.

The STOXX Europe 600 Oil and Gas index fell 0.5 per cent, as crude oil prices dropped more than 1 per cent amid worries that rising Iranian output would deepen global oversupply, offsetting expectations of a drop in US production.

France's Thales rose 8 per cent as the company raised its dividend after posting higher-than-expected core profit and record orders in 2015.

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