European shares fall, pulled down by drugmakers

* FTSEurofirst 300 index down 0.5 percent

* Pharmaceuticals drop after Novartis (Xetra: 904278 - news) results

* Gold miner Fresnillo (Other OTC: FNLPF - news) rebounds (Adds details, updates prices)

By Atul Prakash and Alistair Smout

LONDON, July 21 (Reuters) - European shares retreated on Tuesday from their six-week high in the previous session, with healthcare leading the market lower after Novartis reported quarterly incomes below analysts' expectations.

The STOXX Europe 600 Healthcare Index was the sector that declined the most, falling 1 percent. Novartis dropped 1.9 percent after the Swiss drugmaker reported a weak performance by its eyecare division in the second quarter.

Novartis also came under pressure from a stronger dollar, which traders said could hurt earnings in general as investors anticipate an interest rate increase by the U.S. Federal Reserve.

"The move in Novartis today is largely down to a strengthening dollar. Some of it was priced in, but it's going to have a continuing effect moving forward," said Mark Foulds, sales trader at ETX Capital.

The FTSEurofirst 300 index of top European shares was down 0.5 percent at 1,605.38 points by 1352 GMT after rising to a six-week high in the previous session.

Gold prices stabilised on Tuesday just above a five-year low, with precious metal miner Fresnillo up 3.3 percent, the top FTSEurofirst 300 riser.

The price of gold has also been hit by the strong dollar. It fell as much as 4 percent on Monday, wiping more than $8 billion off the combined market value of global gold-mining companies.

"Much more action has been taking place in precious metals ... should the slump in commodities persist and intensify, many will ask themselves if this is the precursor to another dip in global growth," Markus Huber, senior analyst at Peregrine & Black, said.

The Greek stock market remained closed, with capital controls still in place. The Greek government submitted legislation to parliament on Tuesday required by its lenders to start talks on a multi-billion euro rescue package. Prime Minister Alexis Tsipras has until Wednesday night to get those measures adopted in parliament.

Swedish entertainment broadcasting group MTG rose 5.9 percent, the biggest gainer on the broader STOXX Europe 600 , after it reported a smaller than expected drop in second-quarter core earnings.

Finnish paper producer Stora Enso (Xetra: ENUR.DE - news) fell 8.8 percent after it reported weaker-than-expected quarterly profit due to production problems and higher costs.

Europe bourses in 2015: http://link.reuters.com/pap87v

Asset performance in 2015: http://link.reuters.com/gap87v

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