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ECB monetary policy meeting on Thursday

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Tech stocks extend gains

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Novo Nordisk hits all-time high

(Updated at 1710 GMT)

By Sruthi Shankar and Khushi Singh

March 4 (Reuters) - European stocks settled just below all-time highs on Monday, as investors digested strong gains in recent sessions and struck a cautious tone ahead the European Central Bank's monetary policy meeting this week.

The pan-European STOXX 600 slipped 0.03%, having scaled another record high earlier in the session and coming close to the 500-mark.

Tech stocks continued to lead market gains across the globe, surfing on a wave of optimism around artificial intelligence. Europe's tech index jumped to touch its highest in more than two decades.

However, losses in cyclical sectors such as miners, travel and leisure and retailers limited overall market gains.

Investors are awaiting a slew of events this week including Federal Reserve Chair Jerome Powell's two-day congressional testimony, the European Central Bank's policy decision and the crucial February U.S. jobs data.

The ECB, set to meet on Thursday, is expected to keep rates at a record high 4% but also likely to lower its outlook for inflation in a nod to eventual cuts.

Data last week showed euro zone inflation dipped in February, but underlying price growth proved to be sticky, dampening expectations for big and fast rate cuts this year.

"The ECB is likely to stay on hold at its next two meetings on March 7 and April 11. Assuming the disinflation trend remains intact, this leaves the June 6 meeting as the most likely candidate for the start of the easing cycle," analysts at BCA Research said.

Markets now see around 90 basis points of rate cuts this year with the first move coming in June.

In corporate updates, Spanish drugmaker Grifols fell 10.0%, driven by volatility around short positioning after it reported a 72% plunge in 2023 profit last week.

Novo Nordisk climbed 3.1% to an-time high after DNB Markets upgraded the Danish drugmaker's shares to "buy" from "hold", calling the acquisition of Catalent, a key manufacturing subcontractor, a "game changer."

Separately, UBS forecast the global market for GLP-1 class of drugs to grow to $126 billion by 2029.

Embracer tumbled 10.2% after the Swedish gaming group looked set to leave the benchmark STOXX 600 index, effective March 18. (Reporting by Khushi Singh and Sruthi Shankar in Bengaluru; Editing by Sherry Jacob-Phillips, Shailesh Kuber and Christina Fincher)