Updates after market close

By Tharuniyaa Lakshmi, Purvi Agarwal and Niket Nishant

July 23 (Reuters) - European shares suffered their steepest one-day drop in over two weeks on Thursday, weighed down by lacklustre earnings, hawkish central bank commentary and elevated crude oil prices.

The pan-European STOXX 600 index .STOXX fell 1.3% to 638.5 points. The index has struggled to break out of a narrow range this month as simmering tensions in the Middle East reinforce inflation fears.

While the European ​Central Bank kept interest rates unchanged on Thursday, markets perceived President Christine Lagarde's comments as suggestive of a potential hike in September.

"The ECB is clearly leaning hawkish. For all the data it will see and the analysis it will conduct between now and September, the decision will, to a large extent, come down to the trajectory of oil prices and conditions in the Middle East," said Claus Vistesen, chief euro zone economist at Pantheon Macroeconomics.

Brent crude futures LCOc1 hit $100 a barrel on Thursday, for the first time since May after Yemen's Houthis said they had attacked ‌two Saudi oil tankers in the Red Sea, adding to concerns over global supply disruptions. The rise in crude prices lifted European energy shares .SXEP up 1.54%.

Meanwhile, the food and beverage index .SX3P fell 4.1%, weighed down by Nestle NESN.S, whose shares tumbled nearly 8%, marking their biggest loss since 1989.

The company raised its full-year organic sales outlook but said it would sell part of its water and premium beverages business to Platinum Equity.

Tech stocks .SX8P slipped 2.9%, led by STMicroelectronics STMPA.PA, which fell 17.7%. after the chipmaker forecast third-quarter revenue slightly below market expectations. BE Semiconductor BESI.AS dropped 7.3% after its second-quarter results.

Offsetting some losses was a near-22% surge in Soitec SOIT.PA after its quarterly revenue beat expectations.

Sentiment towards tech stocks has been mixed, as investors have punished U.S. hyperscalers such as Alphabet for their rising AI spending, while beneficiaries of that spending are struggling with lofty valuations.

"You're seeing more questions being asked about where's the future revenue going to come from... twelve months ago the rage was about hyperscalers and the same questions were asked. Now, the semis came into the fall," said Rushabh Amin, multi-asset portfolio manager at Allspring Global Investments.

"Even if you have decent earnings, there is a kind of drag coming from a slight unwind in sentiment and in positioning."

Among other stocks, TotalEnergies TTEF.PA gained 2.5% after reporting its strongest quarterly earnings in nearly three years, boosted by higher oil prices and robust refining margins.

Budget airline easyJet EZJ.L rose 2.7% despite a 70% drop in third-quarter profit.

Finnish forestry group Stora Enso STERV.HE reported a quarterly operating profit below market expectations on Thursday, sending its shares down about 8.5%.