UPDATE 2-European shares dip on high yields and profit-taking; banks rally

* Nokia surges to top of STOXX 600
* China sales drive Unilever Q1 beat
* Bank shares up 1.4% to 14-month highs

(Updates to market close)
By Sruthi Shankar and Ambar Warrick
April 29 (Reuters) - European stocks ended lower on
Thursday, even as bank shares hit 14-month highs on strong
quarterly earnings, as a rise in euro zone bond yields saw
investors lock in profits at near-record levels.
The pan-European STOXX 600 index .STOXX fell 0.3% to
438.77, coming further off a record peak of 443.61 hit last
week.
Traders cited the pullback to investors taking in profits
after "stellar results". The STOXX 600 had surged to record
highs on anticipation of a strong earnings season, as well as
optimism over steady COVID-19 vaccination programs.
Bank stocks .SX7P were the best performers for the day, as
Standard Chartered STAN.L added another notch to a series of
strong earnings reports this week, including those from HSBC
HSBA.L and Santander SAN.MC .
The sector was also supported by a jump in euro zone bond
yields, after U.S. economic growth and German inflation data
came in higher than expected, strengthening the case for a
pullback in central bank stimulus. Treasury yields also hit a
two-week high. GVD/EUR US/
But the rise in yields put pressure on other European
sectors, particularly cyclical stocks that have rallied this
year. Travel and leisure stocks .SXTP , the best-performing
European sector this year, fell 0.7%, coming off record highs.
Automobile stocks .SXAP led losses on Thursday with a 2.6%
fall after U.S. carmaker Ford F.N said a global semiconductor
shortage may slash second-quarter production by half.
Still, European earnings are seen jumping 71.3% in the first
quarter, according to Refinitiv IBES data. Almost a third of the
STOXX 600 companies have reported so far, and a
higher-than-usual 68% have topped profit estimates.
Consumer goods giant Unilever ULVR.L rose 3.3% as a
pick-up in home cooking and a strong economic recovery in China
drove better-than-expected quarterly sales. Finnish telecom network equipment maker Nokia NOKIA.HE
surged 8.4% to the top of the STOXX 600, as growth in sales of
network and 5G equipment boosted its earnings. "The majority of the reported firms sound constructive on
the outlook for the remainder of the year," European equity
strategists at Barclays wrote in a note, but added that the high
expectations had been priced in.
Among decliners, steel pipe maker Tenaris ' TENR.MI Milan
shares fell 6.8% and were among the top losers on the STOXX 600
after the company posted a bigger-than-expected 30% fall in
first-quarter core profits. Danish wind farm developer Orsted ORSTED.CO fell 6.7%
after lower wind speeds and cable problems hit its first-quarter
earnings.