European shares retreat as rising bond yields weigh

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March 12 (Reuters) - Rising bond yields dragged European stocks lower on Friday, but major bourses were set for strong weekly gains as stimulus and vaccination programmes spurred hopes of a solid economic recovery.

The pan-European STOXX 600 fell 0.4% in early trading, after a four-session winning streak drove the index to pre-pandemic highs a day earlier.

With the 10-year U.S. Treasury yield back above 1.6%, investors booked some profits, especially in the tech sector, which was down 1.4%.

Dutch company Prosus, which holds a third of Chinese tech giant Tencent Holdings, dropped 4.8% as the Chinese market regulator fined 12 companies including Tencent related to deals that demonstrated illegal monopolistic behaviours.

German carmaker Daimler slipped 2.0% after French rival Renault sold its entire stake in the company at a discount.

British luxury group Burberry jumped 7.2% to the top of STOXX 600 after saying it had seen a strong rebound in sales since December. (Reporting by Sruthi Shankar and Devik Jain in Bengaluru; Editing by Subhranshu Sahu)