European shares ended lower on Tuesday, dragged down by losses in technology and banking stocks amid concern about higher interest rates.

The FTSEurofirst 300 index of top European shares closed 0.53 percent lower at 1,574.07 points after breaking a five-day losing streak in the last session.

This is still a controlled move and not yet a correction, Boris Boehm, head of equity fund management at Nordinvest, said, adding that the market had been overbought.

Britain's FTSE 100 ended 0.72 percent lower, France's CAC 40 was down 0.71 percent and Germany's DAX closed 0.36 percent lower.

Investors were still concerned about higher borrowing costs as they feared central banks could raise interest rates to cap inflation.

These fears hurt interest-rate-sensitive shares such as banking stocks, in particular.

British mortgage bank HBOS Plc led decliners, falling 3.6 percent, after its share of new mortgages slumped and it said it had seen a rise in requests for refunds on past bank charges.

The lender's comment that competition had intensified among UK mortgage lenders spilled over and sent Northern Rock down 2.8 percent, Royal Bank of Scotland down 2.7 percent and Hypo Real Estate down 1.5 percent.

The DJ Stoxx European technology sector index slipped 1.6 percent after Texas Instruments cut its second-quarter revenue target late on Monday.

On the upside, positive brokerage comments lifted German engineering group Siemens by 1.1 percent to top German gainers, and an Exane BNP upgrade helped the top French gainer, media group Lagardere , to climb 2.7 percent.

Shares in British engine maker Rolls-Royce gained 3.4 percent to top the FTSE 100 leaderboard as traders cited a series of positive broker notes ahead of the International Paris Air Show next week.

Austrian steelmaker voestalpine gained 2.7 percent after a string of broker upgrades and as traders warmed to its takeover offer for peer Boehler-Uddeholm .