European shares slipped for a second session on Tuesday after strong November gains, as luxury stocks weighed and European Central Bank policymakers pushed back market expectations of interest rate cuts next year.

The pan-European STOXX 600 index was down 0.4% by 0824 GMT.

Shares of luxury firms LVMH, Richemont, and Kering fell about 2% each, among the top drags on the STOXX 600.

The benchmark closed at an over two-month high on Friday, fuelled by expectations that major central banks including the Federal Reserve and the ECB are done hiking interest rates.

The ECB may need to raise interest rates again if the inflation outlook worsens, and the bank should not rush to ease policy too quickly after the steepest set of rates hikes on record, Bundesbank chief Joachim Nagel said on Tuesday.

ECB President Christine Lagarde said on Monday the bank's fight to contain price growth is not yet done.

Investors will focus on a slew of economic data this week including euro zone inflation numbers and U.S. Personal Consumption Expenditures index - the Fed's preferred inflation gauge - for clues on the monetary policy path.

Among individual stocks, Julius Baer slipped 1.5% as Morgan Stanley downgraded the Swiss bank to "underweight" from "equal-weight," concerned by the quality of some of its assets.

Belgian pharmaceutical firm Argenx tumbled 16.3% after results from an advance study of Vyvgart Hytrulo showed it failed to meet primary and secondary endpoints. (Reporting by Sruthi Shankar in Bengaluru; Editing by Sonia Cheema)