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Euro zone bond yields rebound after hot U.S. inflation
data
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France's Saint-Gobain jumps on record annual revenue
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Elekta top of the STOXX 600 after upbeat Q3
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German economy shrinks 0.4% in Q4
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STOXX 600 falls 1.0% on Friday, down 1.4% this week
(Updates prices to close; adds chart, details)
By Shreyashi Sanyal and Bansari Mayur Kamdar
Feb 24 (Reuters) - European shares slid on Friday to end
the week lower as a slew of U.S. economic data fed into fears
that central banks are far from finished hiking rates.
The STOXX 600 index fell 1.0%, reversing early
gains, after U.S. inflation data came in hotter than expected
and added to worries that the Federal Reserve might have to keep
interest rates higher for longer in the world's largest economy.
"The Fed has much more work to do, and even if they only
raise rates a couple more times, it is extremely unlikely that
they will be cutting rates this year – as was consensus and in
market-based pricing as recently as a few weeks ago," said Chris
Zaccarelli, chief investment officer for Independent Advisor
Alliance.
Euro zone government bond yields rebounded to around their
highest levels in more than a decade, while trader forecasts for
the peak in European interest rates rose again to around 3.8%
after the U.S. data.
The pan-European index ended the week 1.4% lower, with
mining stocks leading declines as metal prices eased on
lacklustre demand in top consumer China and a stronger dollar.
Data earlier in the day from Germany showed Europe's biggest economy contracted in the fourth quarter of 2022 as inflation and an energy crisis took a toll on household consumption and capital investment. Still, a GfK institute survey signalled that German consumer sentiment is set to improve for a fifth consecutive month in March as energy prices drop.
"Every day, there seems to be just enough contradictory economic data to keep us all guessing about exactly which box those central bankers will check when it comes to their next rates meeting," said Danni Hewson, head of financial analysis at AJ Bell.
In earnings-driven news, Compagnie de Saint-Gobain gained 4.8% after the construction materials company posted record annual revenue that exceeded analysts' expectations on strong growth in all its regions on Thursday.
Radiation therapy equipment Elekta jumped 9.2% to the top of the STOXX 600 after its third-quarter earnings beat expectations.
German chemicals giant BASF SE fell 7.9% as it flagged a decline in annual earnings and said it plans to cut 2,600 jobs and halt buybacks. Travel & leisure stocks slid 3.0%, dragged down by British Airways-owner IAG .
IAG agreed to pay 400 million euros ($423.84 million) to Spain's Globalia for the remaining 80% of Spain-based Air Europa it did not already own, and predicted its first annual profit since the pandemic. Its shares fell 6.5%.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Most European sectors end the week on a sour note, miners lead losses ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Shreyashi Sanyal and Bansari Mayur Kamdar in Bengaluru; Editing by Sherry Jacob-Phillips, William Maclean)
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