* Telenor ( TELNF ) cuts 2026 outlook after Q2 earnings miss

* Utilities lead sectoral losses on STOXX 600

* ABB announces $5.5 bln deal for UK's Rotork ( RTOXF )

* Europe heads for strongest earnings season since 2022

(Updates prices, adds analyst comment and details throughout)

By Tharuniyaa Lakshmi and Johann M Cherian

July 16 (Reuters) - European stocks slipped on Thursday as

investors assessed a slew of corporate earnings, while

escalating tensions in the Middle East threatened to disrupt

energy supplies again, reinforcing inflation fears.

The pan-European STOXX 600 index shed 0.4% to 638.83

points by 0829 GMT, with utilities, down 1.1%, leading

broad-based sectoral losses.

European tech stocks also fell, with chip equipment maker ASML's

shares reversing early gains, while semiconductor

stocks STMicroelectronics and BE Semiconductor

were down 3% and 2%, respectively.

The slide in tech shares came despite Taiwan's TSMC

, the world's largest producer of advanced AI chips,

reporting a record 77% jump in second-quarter profit,

underscoring robust demand for AI infrastructure.

The sector has shown signs of cooling this month following a

strong run in the previous quarter.

Investors continue looking ahead to what is expected to be

Europe's strongest earnings season in more than three years,

even as concerns persist over the region's lack of major AI

exposure like the United States as well as rising costs linked

to the Mideast conflict.

Those concerns have weighed on the STOXX index this month,

which has slipped about 2% from the record high it hit on July

3. Renewed U.S.-Iran hostilities have also prompted investors to

ramp up bets for at least one 25-basis-point rate hike by the

European Central Bank by year end, LSEG data showed.

"For the time being, we prefer to be neutral (on) U.S.

versus Europe, and slightly overweight Europe as far as we

believe the conflict can abate again," said Michele Morganti,

senior equity strategist at Generali Investments.

"We think that Europe can then recover in terms of the economic

momentum and earnings can recover too."

Among individual companies, shares of Delivery Hero

slipped 0.6% after Uber ( UBER ) said it launched a

public takeover offer valuing the German food delivery company

at about $14.8 billion. Delivery Hero has rallied nearly 70% so

far this year following reports of the imminent bid.

Meanwhile, ABB slipped 3.3% after it announced a

$5.5 billion takeover of automation company Rotork ( RTOXF ), and

it said its second-quarter operating profits beat expectations.

Rotork's ( RTOXF ) shares soared 66%.

In regional earnings, Swedish industrial technology group

Indutrade jumped 11.6% after reporting

better-than-expected second-quarter results.

Telenor ( TELNF ) tumbled 11.6% after the Norwegian telecom

operator cut its 2026 outlook following weaker-than-expected

second-quarter earnings.

French advertising group Publicis rose 1.4% after

reporting higher first-half revenue, driven by strong demand for

AI-driven marketing services.