European shares slide over 1% ahead of U.S. inflation data

European shares extended losses to a fourth session on Friday as market participants braced for May U.S. inflation data that could guide the Federal Reserve's policy decision next week.

All sectors were trading well in negative territory, with banks (.SX7P) weighing the most on the pan-European STOXX 600 index (.STOXX), which lost 1.3%.

The index was on course to end the week about 2.5% lower - its sharpest decline since early May.

Concerns also mounted about demand and growth in China, the world's second-largest economy, after Shanghai and Beijing returned to new COVID-19 alerts on Thursday and imposed new lockdown restrictions.

The U.S. Labor Department's Consumer Price Index was expected to have accelerated to 0.7% last month from 0.3% in April.

But when stripped of volatile food and energy products, a nominal 0.1 percentage point to 0.5% was seen cooling.

The data is due at 1230 GMT, and bets have grown that the Fed will increase beyond the two 50-basis point hikes it plans for next week and July.

"Consensus estimates for U.S. CPI release, with risks skewed to the upside, have raised worries about the Federal Reserve's ability to bring inflation under control while avoiding a recession," said Mark Haefele, chief investment officer at UBS Global Wealth Management.