*

Focus on Fed minutes, Nvidia ( NVDA ) earnings

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AstraZeneca ( AZN ) rises on upbeat revenue forecast

*

Saipem climbs on winning $3.7 bln contract

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STOXX 600 off 0.2%

(Updated at 1553 GMT)

By Sruthi Shankar and Johann M Cherian

May 21 (Reuters) - European stocks closed slightly lower

on Tuesday, their third out of four sessions in the red, as

caution around interest rate reductions dominated, with

investors waiting for economic data due later in the week.

The pan-European STOXX 600 index ended 0.2% lower,

after hitting a one-week low earlier in the session, with banks

and luxury stocks leading sectoral losses,

down around 0.9% each.

The lender-heavy Italian share index lagged

regional peers, dropping 0.6% to hit a more than one-week low.

The STOXX index has eased from record highs since

European Central Bank policymakers cautioned against expecting

successive interest rate reductions in

June and July

.

Traders anticipate cuts worth 66 basis points from the

ECB by year-end, according to the LSEG rate probabilities app,

with the first seen in June.

Eurozone negotiated wage data for the first quarter along

with May manufacturing data expected on Thursday could shed

light on the state of the economy and offer clues to the

trajectory of interest rates.

"Eurozone productivity is weak, so the bulk of the

increase in labour costs over Q1 most likely reflects higher

employee compensation. Elevated eurozone wage pressures suggest

the easing cycle will be shallow," said Win Thin, global head of

markets strategy at Brown Brothers Harriman.

Investors will also focus on minutes from the Fed's last

policy meeting and chip giant Nvidia's ( NVDA ) earnings on

Wednesday to see if the recent momentum that pushed U.S. and

European equities to record highs continues.

On Tuesday, data showed German producer prices fell more

than expected in April, mainly due to lower energy prices.

Drugmaker AstraZeneca rose 2.2%, among top gainers

on the UK's main FTSE 100 index, after saying it aimed

to increase revenue by about 75% to $80 billion by 2030.

The broader healthcare sector outperformed the

main STOXX index with a 0.7% climb.

Italy's top insurer, Generali, dipped 1.5% after

reporting first-quarter results, with some analysts pointing to

lower-than-expected profitability in the property and casualty

business.

The energy contractor

Saipem rose 4% after securing $3.7 billion in

contracts with a subsidiary of French oil major TotalEnergies

.

Swiss fastening systems maker SFS Group climbed 8%,

after UBS upgraded the stock to "Buy" from "Neutral".