UPDATE 2-European shares retreat from 12-month highs on Hexagon outlook, dimmer rate cut hopes

* Hexagon slips after Q2 sales warning
* Chipmakers weak after Samsung's forecast
* German industrial orders weaker than expected in May
* Strong U.S. jobs data dims hopes of 50 bp cut by Fed

(Updates with closing prices, edits)
By Susan Mathew and Medha Singh
July 5 (Reuters) - European shares broke a six-day winning
streak on Friday as poor German data and a downbeat outlook from
Sweden's Hexagon weighed, and losses deepened after strong U.S.
jobs data saw investors trimming bets of an aggressive rate cut
by the U.S. Federal Reserve this month.
The pan-European STOXX 600 index .STOXX finished down 0.7%
on broad-based losses, capping the week's gains at 1.4%. The
index retreated from more than 12-months highs hit a day
earlier, fuelled by hopes of easier monetary policy from major
central banks.
The strong rebound in U.S. job growth in June tempered
expectations that the Fed would cut interest rates by 50 basis
points this month, which sent the dollar higher and U.S. stocks
lower. .N MKTS/GLOB
However, bets of a 25 basis point cut were still in play as
data showed wage gains in the U.S. were tepid. "These (jobs growth) are good numbers, but a rate cut in
July is still all but inevitable," said Luke Bartholomew,
investment strategist at Aberdeen Standard Investments.
Hopes of accommodative monetary policy by major central
banks and a U.S.-China trade truce were drivers of a fourth week
of gains for the European stocks benchmark.
With talks between Washington and Beijing set to resume next
week, Citi economist Catherine Mann warned that the truce had
not removed the uncertainty that is still weighing on the global
growth outlook. Swedish industrial technology group Hexagon HEXAb.ST is
among those suffering. It announced 700 job cuts and warned of a
drop in quarterly organic sales.
One trader said the "fairly big cut for a one-month
downturn" had sent shockwaves through local firms and any with
exposure to China.
Hexagon shares tumbled 11% to the bottom of the STOXX 600
for their worst day in almost nine years.
That, along with news that German industrial orders had
fallen far more than expected in May, weighed on industrial
stocks such as Schneider Electric SCHN.PA , Siemens SIEGn.DE
and Sandvik SAND.ST .
The industrial goods sector .SXNP was among the biggest
decliners, down 1.9% in its worst session since May.
Samsung Electronics 005930.KS forecast a plunge in its
second-quarter operating profit. citing the U.S.-China trade
war, and dragged European chipmakers AMS AMS.S ,
STMicroelectronics STM.MI and Siltronic WAFGn.DE down more
than 2.4%.
The tech index .SX8P slid 1.3%.
Meanwhile, bank stocks .SX7P , which tend to gain in a high
interest rate environment, rose 0.3%.