(Reuters) -European shares lost nearly 2% on Tuesday, after hitting record highs a day earlier, as tobacco companies weighed on London stocks and many regional indexes edged off pre-pandemic highs. British American Tobacco and Imperial Brands fell more than 7% each following a report the Biden administration was considering requiring tobacco companies to lower the nicotine levels in all cigarettes sold in the United States. BAT shares recorded their biggest percentage drop since March 2020. Britain’s blue-chip FTSE 100 fell 2% and logged its sharpest percentage decline in two months, while Germany’s DAX was down 1.6%. Spain’s IBEX dropped 2.9% for its worst session since December. The pan-regional STOXX 600 index dropped 1.9% in its biggest one-day decline this year, accelerating losses after a lower opening on Wall Street. [.N] After bumper earnings reports from U.S. banks last week, investors are awaiting results from mega-cap technology firms, which helped a strong U.S. market recovery last year but have lagged recently. In Europe, profits for STOXX 600 companies are expected to jump more than 55% in the first quarter, according to Refinitiv IBES data, with much of the support coming from consumer cyclical and industrial companies. “It’s earnings and results have been fantastic, but it’s starting to come at the higher end, so people are starting to think there is no more upside, how much better can it get,” said ETX Capital analyst Michael Baker regarding the day’s pull-back. BMW’s first-quarter earnings on Tuesday showed a much stronger bounce back than expected, helped by higher prices and strong Chinese demand. The STOXX 600 has hit a series of all-time highs this month and climbed about 9% so far in 2021, broadly in line with New York’s S&P 500. All major indexes in Europe ended the day in the red. Travel & leisure, banks and insurers fell after strong gains this year. Austrian sensor specialist AMS slumped almost 13% after traders cite a media report that the company has lost some Apple business. Danske Bank lost 7.6% after the United States and the Federal Retirement Thrift Investment Board filed a claim for compensation against the Danish bank and its former chief executive Thomas Borgen. French food group Danone slipped 1.8% after reporting a 3.3% fall in first-quarter sales as lockdowns continued to dent its bottled water and baby food sales.