Updates after markets close

By Twesha Dikshit and Avinash P

May 15 (Reuters) - Europe's STOXX 600 slid and logged weekly losses on Friday as concerns over energy-induced inflation pressures due to the U.S.-Iran standoff rattled global markets.

The pan-European benchmark .STOXX closed down 1.5% at 606.92 points, snapping two straight days of gains. Germany's DAX .GDAXI declined the most among regional bourses, down 2.1% on Friday.

Positive corporate earnings and a rally in semiconductor shares aided gains this week, but were overshadowed by cost-of-living worries as energy prices stay elevated.

Europe's materials index .SXPP led declines, dropping 5.1% tracking weaker metal prices, while the defence sector .SXPARO fell 3.6%, the worst weekly performance among individual sectors.

Semiconductor firms paused their recent rally, with ASML ASML.AS, and Aixtron AIXGn.DE down 4.4% and 6%, respectively.

U.S. President Donald Trump finished his two-day meeting with China's President Xi Jinping, which yielded little headway with regard to reopening the Strait of Hormuz. Trump also said his patience with Iran was running out.

"Energy prices are pretty much the biggest problem facing Europe and ultimately, there doesn't appear to be any political will to address that and markets are pricing that," said Michael Hewson, senior market analyst at iForex.

Inflation data out of several European countries and the U.S. this week showed that the jump in energy costs have started reflecting in consumer and producer prices, prompting investors to price in at least two rate hikes by the end of the year by the European Central Bank. Reflecting this, bond markets also witnessed a selloff.

"Markets which are more reliant on foreign energy imports and manufacturing heavy, which is energy intensive, feel the pain a bit more," said Daniel von Ahlen, senior macro strategist at GlobalData TS Lombard.

Economically sensitive cyclical sectors also came under pressure, with banks .SX7P dropping 6% as BNP Paribas BNPP.PA and Deutsche Bank DBKGn.DE lost 3% and 2.6%, respectively.

Meanwhile political uncertainty was rife in the UK as Prime Minister Keir Starmer struggled to hold on to power after his main rival signalled a challenge to his leadership. The blue-chip FTSE 100 .FTSE ended down 1.7%, while the more domestically-focused mid-cap index .FTMC lost 1%.

Among others, LVMH LVMH.PA dipped 1.1% after the conglomerate agreed to sell fashion brand Marc Jacobs.

Stellantis STLAM.MI fell 4.2% after the carmaker signed a roughly 1-billion-euro ($1.16 billion) deal with China's Dongfeng 600006.SS to produce Peugeot- and Jeep-branded vehicles.

Bucking the trend, Technoprobe TPRO.MI soared 32.3% after the Italian semiconductor firm upgraded its 2026 outlook.