European shares were subdued on Friday, with strength in the telecommunications sector offset by a sell-off in global equities following hotter-than-expected US inflation figures, which dampened June rate-cut bets.

The pan-European STOXX 600 index was flat, as of 8:16 GMT but was set for its eighth consecutive weekly gain.

Thursday’s robust US producer price data tempered expectations of a June interest rate cut.

Rate-sensitive real estate index led the losses with a 1.2% decline.

In corporate updates, Swisscom shares gained 2.6% after the telecom company said it will buy Vodafone Italia for 8 billion euros ($8.70 billion) and merge the business with its Italian subsidiary Fastweb.

European shares ease from record high

Vodafone shares surged 4.1%, with the broader telecommunications index leading sectoral gains, rising 0.8%.

Shares in Vonovia dropped 5.5% after Germany’s largest landlord reported its largest-ever loss in 2023, due to further writedowns on the values of its properties.

Later in the day, investors will be looking out for Italy’s February consumer prices data, as well as US industrial production data for February.