By Ankika Biswas

(Reuters) -European shares were subdued on Tuesday as declines in telecom and energy stocks offset gains in materials, while investors awaited minutes from the Federal Reserve's latest meeting to support bets that policymakers are done with interest rate hikes.

Minutes from the Fed's latest policy meeting, where it held rates steady, are due at 1900 GMT (2 p.m. ET).

"The theme permeating the market is the Fed's battle with inflation has been won and that despite what the likes of Powell and his colleagues might be saying about another hike still being on the table, market does not really believe that message anymore," said Stuart Cole, head macro economist at Equiti Capital.

Meanwhile, European Central Bank (ECB) officials have actively tried to shoot down growing bets of rate cuts amid data signalling a sustained fall in inflation and a likely recession.

ECB policymaker Francois Villeroy de Galhau argued rates will likely remain unchanged for the next few quarters, a day after Pablo Hernandez de Cos noted it was "premature" to talk about rate cuts. Euro zone sovereign bond investors were on hold on Tuesday.

Telecom stocks lost 0.4%, while energy shed 0.5%, tracking retreating oil futures ahead of an OPEC+ meeting.

Material stocks led sectoral gains, up 0.7%, while retail stocks rose 0.6%.

Among individual companies, Swiss hearing aid maker Sonova topped the STOXX 600, gaining 6.2% after a smaller-than-feared warning on annual core profit.

Rheinmetall gained 3.8% as the German arms company expects sales of 13 billion-14 billion euros ($14.18 billion to $15.27 billion) in revenue in 2026 and operating margins of more than 15%.

Meanwhile, Monte dei Paschi di Siena lost 6.2% after Italy sold a 25% stake in the bailed-out bank.

Teamviewer dropped 8.7% after Deutsche Bank on behalf of TigerLuxOne (Permira) launched a placement of 13 million shares in the German software company at a discount of about 8% to Monday's closing price.

GEA Group slumped 5.4% after a bookrunner said Groupe Bruxelles Lambert SA's unit Oliver Capital was selling 11.25 million shares in the German food-processing equipment maker.

LVMH shed 1.2% after UBS downgraded the French luxury giant to "neutral" from "buy". The sector was down 0.2%.

Banco BPM lost 2.1% after Deutsche Bank downgraded it to "hold" from "buy" and removed it from its EU banks top picks.