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* Basic resources stocks worst weekly performers
* Bank stocks lead losses for the day
* STOXX 600 marks worst week since late-Feb, down 1.2%
* Bank of Ireland at bottom of STOXX 600
(Updates to market close)
By Sagarika Jaisinghani and Ambar Warrick
June 18 (Reuters) - A slide in European bank and energy
stocks was exacerbated by hawkish comments from a Federal
Reserve official, which also saw the STOXX 600 index snap a
four-week winning streak as fears of U.S. policy tightening came
to the fore.
The pan-European STOXX 600 index ended 1.6% lower
in its worst day in five weeks, with bank and energy
stocks leading declines. The index also dropped 1.2%
this week.
Sentiment was also dented by the European Union losing its
bid for speedier COVID-19 vaccination deliveries from UK
drugmaker AstraZeneca, which could slow the pace of a
steady vaccination campaign.
The banking sector, which typically does well when interest
rates are high, plunged nearly 3% as concerns over an eventual
reduction in liquidity saw investors locking in recent gains.
Fed official James Bullard said the Fed could start
tightening rates by as early as late 2022, calling it a natural
response to economic growth and inflation moving quicker than
expected, as the United States reopens from the COVID-19
pandemic.
His comments came after the Fed signalled a hawkish tilt
earlier this week, which had rattled risk-driven markets.
Commodity markets were also hit by the Fed, with European
energy stocks falling 2.9% on Friday, in line with lower
oil prices.
Basic resources stocks were the worst performers
this week, down nearly 8% as fears over Chinese caps on copper
prices weighed. The sector had its worst week since the peak of
the COVID-19 pandemic in March 2020.
"The market has been polarised in certain positions," said
Andrea Cicione, head of strategy at TS Lombard.
"We've been very positive on financials and energy since
last November and now we're seeing a reversal of that as
investors scale back. But this is temporary phase; there's
definitely more upside for financials and energy, which are
still relatively cheap."
Germany's DAX index fell 1.8% as data showed a
bigger-than-expected jump in May producer prices.
Bank of Ireland tumbled 7% to the bottom of the
STOXX 600, after it announced the sale of some non-performing
mortgage exposures.
Danish pharmaceutical company Orphazyme sank 44%
after saying it had failed to win support from the U.S. Food and
Drug Administration for its arimoclomol drug, a treatment
designed for genetic disorder Niemann-Pick disease type C.
Tesco, Britain's biggest retailer, fell 4.1% as it
reported a sharp slowdown in quarterly underlying UK sales
growth, while car dealership Inchcape rose 3% after
raising its annual profit forecast.
(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by
Shounak Dasgupta, Rashmi Aich and Jonathan Oatis)
