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* Bank of Ireland slides on weaker-than-expected forecast

* France's Iliad to take $1.3 bln stake in Sweden's Tele2

* Zealand Pharma shares surge on liver disease drug trial data

* Euro zone, U.S. inflation data in focus this week

Feb 26 (Reuters) - European shares fell on Monday, led by a decline in commodity-linked stocks, while investors awaited key inflation data expected this week from the euro zone and the United States.

The pan-European STOXX 600 was down 0.4% by 9:40 GMT, on track for the biggest one day drop in nearly two weeks. The broader European market closed at an all-time high on Friday and marked its fifth straight week of gains.

The basic resources sub-index led losses on Monday with a 1.6% drop, while oil and gas stocks fell 0.9% as prices of most metals and crude oil slipped after the dollar rose on market views that higher-than-expected inflation could delay cuts to interest rates.

In a data-packed week, focus will be on euro zone consumer confidence data, business activity data and figures on the region's consumer prices for the month of February.

Headline CPI for the European Union, expected on March 1, is seen slowing to 2.5% from 2.8%, with the core at 2.9% versus 3.3%.

"As for euro zone inflation, lower energy prices should lead to downward revisions to headline inflation in the near term, but core inflation should remain broadly unchanged throughout the forecast horizon," HSBC analysts said.

A slowdown in euro zone inflation could prompt the European Central Bank (ECB) for a much-awaited interest rate cut, although the market sees almost no chance of a rate cut in ECB's upcoming March meeting, but remains almost fully priced for a cut in June.

The U.S. Federal Reserve's favoured core measure of personal consumption expenditures prices for January will likely be this week's top market mover, along with February factory output data.

Recent strength in the U.S. economy is a major reason the market has pushed out the expected timing of the first Fed rate cut to June from May.

French investor Xavier Niel and his Iliad telecoms group have agreed to buy a 19.8% stake in Swedish telecoms operator Tele2 for 13 billion crowns ($1.26 billion). Tele2 shares rose 9%.

Zealand Pharma surged 21.2% to the top of STOXX 600 after an experimental obesity treatment it is developing with Boehringer Ingelheim yielded "groundbreaking" Phase II trial results in the treatment of fatty liver.

Bank of Ireland tumbled 11.6% after a weaker-than-expected forecast from the country's biggest lender took the shine off a more than tripling of shareholder returns on the back of surging full-year profits. (Reporting by Khushi Singh; Editing by Sherry Jacob-Phillips; Editing by Shounak Dasgupta)