* STOXX 600 down 0.15
* Italy's FTSE MIB down 0.4 pct as political tensions weigh
* Stora Enso sinks on profit miss
* Bekaert and Wessanen plunge on profit warnings (Adds details, closing prices)
By Helen Reid
LONDON, July 20 (Reuters) - European shares fell on Friday as earnings updates disappointed, with auto stocks bearing the brunt of trade tensions that caused a selloff in the Chinese yuan overnight.
As U.S. officials work towards slapping tariffs on car imports, autos shares were the biggest fallers, down 2.1 percent.
U.S. President Donald Trump said in a CNBC interview he was ready to put tariffs on $500 billion of imported goods from China.
The broader pan-European STOXX 600 fell 0.15 percent, with losses capped by gains in healthcare and consumer staples, considered less risky sectors.
Italy's FTSE MIB, down 0.4 percent, underperformed on reports of rising tensions within the country's coalition government.
Paper maker Stora Enso fell 13.5 percent after reporting second-quarter profits that missed expectations, blaming production problems, maintenance and tight wood supply.
It dragged down peer UPM-Kymmene, which lost 5.3 percent, while paper packaging maker Huhtamaki fell 5.5 percent after its results.
Swedish builder Skanska was another prominent faller, down 4.6 percent after reporting an unexpected drop in second-quarter profit due to new project writedowns at its struggling U.S. construction business.
Atlas Copco fell 5.5 percent after reporting lower-than-expected order growth in its Vacuum Technique unit and saying demand from the semiconductor industry would fall.
Overall, listed European firms are expected to report stronger earnings growth in the second quarter, while investors are honing in on companies' future guidance for any change due tariff developments, with autos particularly in focus.
"Numbers for Q2 are probably not so much impacted from trade conflict, but I think everyone is curious to see if companies see any indications of delayed capex decisions, for example, on the back of more noise coming from the political front," said Britta Weidenbach, head of European equities at DWS.
French car parts maker Faurecia initially made gains after it reported higher first-half profit and raised its outlook, but fell back 7.4 percent as analysts saw margin growth as disappointing.
"The discussions around trade are simply not helpful when it comes to the risk premia for auto companies - and that's not helpful for valuations," said Weidenbach.
Among gainers were Italian drugmaker Recordati and Finnish pharma company Orion, both benefiting from broker recommendation upgrades.
Goldman analysts raised Recordati to a "buy", saying they saw the possibility for an accelerated M&A strategy, while a Jefferies analyst upgraded Orion to "hold", saying data on a prostate cancer drug in September would be a catalyst for the stock.
Big profit warnings savaged some shares outside the large-caps.
Shares in food processing firm Wessanen fell 26.6 percent to a one-year low after it cut its organic growth outlook for the year to "moderate".
Belgian steel wire maker Bekaert plunged 19 percent, hitting a five-year low after saying it expected underlying operating profit 20 percent below analysts' estimates in the first half, blaming wire rod costs partly driven up by tariffs.
Reporting by Helen Reid and Danilo Masoni, Editing by Kit Rees and John Stonestreet