UPDATE 2-European shares trim losses after ECB president's speech

* Lagarde says ECB is monitoring rising borrowing costs

* Bond yields drop

* G4S (CSE: G4S ) slumps after GardaWorld withdraws from bid battle

* Tech stocks fall further from 20-year high (Updates to market close)

By Shashank Nayar and Ambar Warrick

Feb 22 (Reuters) - European shares trimmed early losses on Monday as comments from the region's central bank brought down treasury yields, though inflation expectations and profit-taking in technology stocks dragged the benchmark index lower.

The pan-European STOXX 600 index .STOXX settled 0.4% down after dropping as much as 1%, led by declines in technology companies .SX8P and retail stocks .SXRP .

A recent rise in sovereign debt yields on forecasts for rising inflation has weighed on risk-driven assets because the higher yields offer safer returns.

But yields in the euro zone dropped on Monday after European Central Bank (ECB) President Christine Lagarde said the bank was closely monitoring rising borrowing costs, which could point towards future ECB intervention in debt markets. current upward trajectory in bond yields it might lead to added pressure on equities, said SocGen strategist Roland Kaloyan.

Regional stocks have rallied sharply off pandemic-driven lows hit last year. But unlike their peers across the Atlantic, they have yet to reach pre-pandemic levels amid concerns over a stalling economic recovery and slow vaccine rollout.

But some industries, such as the technology sector, have flourished in the face of the pandemic.

The tech sector hit a 20-year high last week and Mirabaud analyst Neil Campling attributed recent losses to profit-taking after a "period of positive price action".

Travel and leisure stocks .SXTP strengthened on Monday after British Prime Minister Boris Johnson set out a phased plan to end the country's COVID-19 lockdown. FTSE 100 .FTSE also trimmed losses through the day, with British Airways owner IAG ICAG.L jumping more than 7% after raising its total liquidity by 2.45 billion pounds ($3.4 billion). company G4S GFS.L , however, tumbled nearly 10% after Canada's GardaWorld said it would not raise its takeover, handing victory to Allied Universal in their months-long bid battle. Atlantia ATL.MI rose more than 4% on expectations that the infrastructure group would receive a binding offer for its 88% stake in motorway unit Autostrade per l'Italia this week. car parts maker Faurecia EPED.PA was another faller, retreating 4.7% after it swung to a net loss in 2020. logistics company Kuehne & Nagel KNIN.S , meeanwhile, rose more than 2% after saying it would buy Asian rival Apex International Corp from private equity firm MBK Partners. ($1 = 0.7104 pounds)