German shares lead Europe lower on inflation worries

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May 31 (Reuters) – German shares led declines in Europe on Tuesday as a bigger-than-expected rise in inflation in the region’s largest economy spurred worries about aggressive central bank action.

Investors now await euro zone annual inflation data for May at 0900 GMT, expected to climb to a record 7.7% after last month’s 7.4% rise. Fears of a sustained rise in energy costs heightened as crude prices gained after Europe vowed to cut most Russian oil imports. O/RnL4N2XM0OC

Germany’s DAX .GDAXI slipped 0.6%, while the region-wide STOXX 600 index .STOXX dropped 0.4% by 0713 GMT, with added volatility as U.S. markets were set to return after a long weekend.

Technology .SX8P and travel .SXTP stocks led losses, down more than 1% each.

On the month, STOXX 600 was set to end down over 1%.

London’s FTSE .FTSE outperformed, up 0.1% on an energy rally and as consumer goods giant Unilever ULVR.L jumped 7% after it named activist investor Nelson Peltz to its board. nL4N2XN14J

Among other stocks, Dutch speciality chemicals maker DSM DSMN.AS jumped 10.4% on plans to merge with Swiss peer Firmenich. DSM also announced the sale of its engineering materials subsidiary for 3.85 billion euros ($4.13 billion) to private equity firm Advent International and German chemicals company Lanxess LXSG.DE nL1N2XN07F nL1N2XN09J

Lanxess surged 10.9%.

(Reporting by Susan Mathew in Bengaluru; Editing by Sriraj Kalluvila)

((susan.mathew@thomsonreuters.com; +91-80-6287-2704;))