UPDATE 2-Europe stocks post worst day of the year; Tobacco firms weigh

* BATS post worst session in a year
* AMS slumps 13% on reports it lost some Apple business
* Danske Bank slides on U.S. lawsuit
* IBEX down 3%, worst session since December

(Updates to close)
By Sruthi Shankar and Susan Mathew
April 20 (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 BATS.L and Imperial Brands
IMB.L 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 .FTSE fell 2% and logged its
sharpest percentage decline in two months, while Germany's DAX
.GDAXI was down 1.6%. Spain's IBEX .IBEX dropped 2.9% for
its worst session since December.
The pan-regional STOXX 600 index .STOXX 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 BMWG.DE 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 .SPX .
All major indexes in Europe ended the day in the red. Travel
& leisure .SXTP , banks .SX7P and insurers .SXIP fell after
strong gains this year.
Austrian sensor specialist AMS AMS.S slumped almost 13%
after traders cite a media report that the company has lost some
Apple AAPL.O business. Danske Bank DANSKE.CO 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 DANO.PA 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.