German shares led declines in Europe on Tuesday as a bigger-than-expected rise in inflation in the region's largest economy spurred worries about aggressive central bank action.

Investors now await euro zone annual inflation data for May at 0900 GMT, expected to climb to a record 7.7% after last month's 7.4% rise. Fears of a sustained rise in energy costs heightened as crude prices gained after Europe vowed to cut most Russian oil imports.

Germany's DAX slipped 0.6%, while the region-wide STOXX 600 index dropped 0.4% by 0713 GMT, with added volatility as U.S. markets were set to return after a long weekend.

Technology and travel stocks led losses, down more than 1% each.

On the month, STOXX 600 was set to end down over 1%.

London's FTSE outperformed, up 0.1% on an energy rally and as consumer goods giant Unilever jumped 7% after it named activist investor Nelson Peltz to its board.

Among other stocks, Dutch speciality chemicals maker DSM jumped 10.4% on plans to merge with Swiss peer Firmenich. DSM also announced the sale of its engineering materials subsidiary for 3.85 billion euros ($4.13 billion) to private equity firm Advent International and German chemicals company Lanxess

Lanxess surged 10.9%.

(Reporting by Susan Mathew in Bengaluru; Editing by Sriraj Kalluvila)