By Shristi Achar A, Shashwat Chauhan and Jesus Calero

(Reuters) -European shares gave up early gains to close lower on Friday as a drop in shares of beauty giant L’Oreal weighed, while the benchmark index clocked weekly, monthly and quarterly declines on French political uncertainties.

The pan-European STOXX 600 closed 0.2% lower, extending losses to the fourth straight session.

The personal and household goods sector shed 1%, dragged by a 3% fall in French beauty giant L’Oreal after its CEO gave a lower market growth forecast during a Fireside Chat hosted by J.P.Morgan.

The benchmark STOXX 600 recorded its first quarterly loss in three, along with a monthly and weekly decline, amid political uncertainties in France following President Emmanuel Macron’s call for a snap election earlier this month.

“It’s a pretty lacklustre end for a generally lacklustre quarter … markets are very nervous about Macron’s gamble,” said Steve Sosnick, chief market analyst at Interactive Brokers.

France’s benchmark CAC 40 index lost 0.7%, ending 8.8% lower for the quarter, underperforming the region’s bourses. The risk premium on French government bonds hit its highest since 2012. [GVD/EUR]

Meanwhile, an opinion poll published in newspaper Les Echos said far-right party National Rally (NR) further rose in its forecast and may reach as much as 37% of the popular vote, two days before the first voting round in the French parliamentary elections.

“There is a risk of a wider European downturn stemming from France, depending on the election outcomes,” said James Reilly, markets economist at Capital Economics.

Technology stocks rose 0.4%, tracking record-setting gains on the tech-heavy Nasdaq, as a softer inflation reading firmed bets of a September rate cut from the Federal Reserve. [.N]

In the continent, French consumer prices rose 2.5% year-on-year in June, in line with expectations, as per preliminary data, while Spain’s EU harmonised inflation rate fell to 3.5% in the 12 months through June.

Among other stocks, Nokia added 1.5% after the Finnish firm agreed to buy Infinera Corp in a deal with an enterprise value of $2.3 billion.

Britain’s largest sportswear retailer JD Sports fell more than 5.4% after U.S. peer Nike forecast a surprise drop in 2025 revenue, while German peer Puma also lost 2.5%

Air France-KLM dropped 4.1% to a record low after Barclays cut the Franco-Dutch airline group to “equal-weight” from “overweight” on political uncertainty.

Finland’s Fortum shed 4.6% after Goldman Sachs downgraded the utility to “sell” on limited share upside and weaker profit and investment outlooks.

(Reporting by Shashwat Chauhan and Shristi Achar A in Bengaluru and Jesus Calero in Gdansk; Editing by Eileen Soreng, Nivedita Bhattacharjee and Chris Reese)

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