UPDATE 3-European shares drop as U.S. tech rout turns contagious

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* European tech stocks mark worst day in over 4 months
* Germany's Hellofresh bottoms out STOXX 600
* French stocks fall despite 100 bln euro stimulus plan

(Updates to market close)
By Ambar Warrick
Sept 3 (Reuters) - European shares retreated on Thursday
with technology stocks leading losses in tandem with their U.S.
peers, while a swathe of middling local economic data fuelled
bets on continued easy monetary policy.
The pan-European STOXX 600 index .STOXX shed 1.4% after
gaining as much as 1.3% earlier in the day, as the technology
sector .SX8P plummeted 3.8% from a 19-year closing high.
The losses came in line with a 3.8% drop in Wall Street's
tech-heavy Nasdaq index .IXIC , triggered by high valuations
and U.S. jobless claims suggesting a stalling in the country's
labour market. .N
Technology has marked the speediest recovery among its peers
from pandemic lows but has also been seen as long overdue for
some capitulation of gains.
Weak local retail sales and service sector data earlier in
the day augured an uneven economic recovery. But markets clung
to the prospect of continued liquidity measures, after a
particularly dismal inflation reading earlier in the week.
The European Central Bank is expected to follow the U.S.
Federal Reserve in keeping monetary policy easy.
"The easy policy for as long we can see is already something
that's been priced in for a long time, and we've gone well
beyond it. A moment of reckoning will come at some point," said
Andrea Cicione, head of strategy at TS Lombard in London.
The selling spread to most other European sectors, with
travel and leisure stocks .SXTP among the few still trading
positive.
The day's losses kept the STOXX 600 comfortably within a
trading range seen since early June. After bouncing from March
lows, a recovery in local equities and the economy appeared to
be stalling.
"The progress we've seen so far was the low-hanging fruit,
but from here on, it will be a lot more difficult to make
progress, and that's already coming across in the data," TS
Lombard's Cicione said.
French stocks .FCHI fell despite the government unveiling
a 100 billion euro stimulus plan to fish its economy out of a
pandemic-induced slump. French drugmaker Sanofi SASY.PA and its British peer GSK
GSK.L fell despite starting a clinical trial for a
protein-based COVID-19 vaccine candidate. British Engineering business owner Melrose Industries
MRON.L topped the STOXX 600 after it flagged signs of a
pick-up in some of its markets as the coronavirus crisis slashed
its first-half profit by 90%. Online food services provider Hellofresh HFGG.DE bottomed
out the STOXX 600, plunging more than 10% in its worst day in
more than two years.