* UK inflation hits 40-year high
* Euro zone inflation still at record high
* Euronext surges on profit beat
* Commerzbank rises on reports of merger talks with
* TUI slide on shares sales announcement
May 18 (Reuters) - European shares slipped on Wednesday led
by technology stocks as worries about inflation and monetary
policy tightening dampened optimism around China's economic
recovery, while shares of UniCredit and Commerzbank rose.
The pan-European STOXX 600 index fell 1.1% after
rising a little more than 3% since Friday.
Technology shares slipped 2.7%, while a fall in
copper prices weighed on basic material stocks.
Data on Wednesday showed British consumer price inflation
hit 9% in April, its highest level on record, inching closer to
the Bank of England's prediction of above 10% later this year.
"Worries about recession reared up again after UK inflation
jumped to the highest level in 40 years," said Susannah
Streeter, senior investment and markets analyst at Hargreaves
Euro zone inflation held steady at a record high 7.4% in
April, driven by soaring fuel and food costs, the EU's
statistics agency said, lowering its estimate from a preliminary
The European Central Bank is set to hike rates shortly after
ending its bond-buying program early in the third quarter,
with the potential for further hikes in coming quarters, echoing
a strategy similar to the U.S. Federal Reserve.
"For the first time overnight index swaps were pricing in
that the ECB would hike by more than 100bps by their December
meeting," said Deutsche Bank strategist Jim Reid.
A rise in optimism on Tuesday, after falling COVID-19 cases
in China drove hopes of more economic activity, proved
The STOXX 600 is in on course to end lower in May, having
marked gains only in March this year. But with a 11% decline
year-to-date, the index has still fared better than the S&P 500
and MSCI's All Country index, which are
down more than 14% over the same period.
In earnings, Euronext rose 3.9% on record quarterly
revenue. Dutch bank ABN Amro topped profit estimates
but shares fell 11.9% as it warned about the impact of the war
Siemens Gamesa jumped 12.6%, after sources said
Siemens Energy is preparing to buy the remaining
stake in the wind turbine maker. The stake is worth 3.14 billion
euros ($3.31 billion).
Germany's Commerzbank AG rose 3.1%, while Italy's
UniCredit SpA gained 2% after a report spoke of
scheduled merger talks before the potential deal was abandoned
because of the Ukraine war.
Holiday group TUI tumbled 12.6% after it
announced a share sale to repay elements of a German state
bailout it received during the pandemic.
(Reporting by Susan Mathew and Shreyashi Sanyal in Bengaluru;
Editing by Rashmi Aich and Barbara Lewis)