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By Medha Singh

March 26 (Reuters) - European shares closed lower on Wednesday, dragged by technology and healthcare stocks, while investors remained concerned about impending U.S. tariffs set to take effect next week.

The pan-European STOXX 600 index .STOXX ended 0.7% lower, making the index's fourth decline in five trading sessions.

The healthcare sub-index .SXDP slipped to two-month lows, hit by losses in heavyweight Novo Nordisk NOVOb.CO.

The technology component .SX8P sank about 2%, dragged by a 6.7% fall in Tietoevry TIETO.HE after Morgan Stanley downgraded the IT services firm's stock to "equal weight" from "overweight".

Energy stocks .SXEP were among a few bright spots, helped by a more than 1% jump in crude prices. O/R

Still, the STOXX 600 index is on track for its best quarter in two years, primarily on hopes that a historic German fiscal package would spur growth in the region's largest economy.

The region has also attracted investors looking for value beyond U.S. equities as the Trump Administration's trade policy fuels U.S. slowdown worries.

"There is concern about the looming tariffs and what could be in store for European manufacturers and exporters. But overall, sentiment towards Europe has turned a corner, and I don't think we're seeing a significant reversal," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

Earlier this week, global risk sentiment improved as U.S. President Donald Trump signalled a more measured approach to trade policy ahead of the April 2 deadline.

Meanwhile, the European Central Bank must be pragmatic and data-driven in setting its interest rates, governing council member Fabio Panetta said in a letter to the Financial Times.

In Britain, finance minister Rachel Reeves cut the government's plans for spending increases to get back on track towards her fiscal targets, but risks in the world economy could raise the prospect of tax hikes later this year.

Local bond investors cheered lower-than-expected British borrowing plans, with Britain's 30-year bond yield GB30YT=RR falling 6 basis points (bps) at 5.306%.

That followed lower-than-expected inflation data earlier in the day, bolstering bets on Bank of England rate cuts.

Britain's blue-chip index FTSE 100 .FTSE and the domestically focussed mid-cap index FTSE 250 rose 0.3% each.

Among other stocks, CD Projekt CDR.WA slumped by 8% after the Polish video game maker said the premiere of "Witcher 4" was scheduled for after 2026.

Online supermarket and technology firm Ocado Group OCDO.L jumped 16.2%, registering its best day since July 2023, after J.P. Morgan upgraded the stock to "overweight" from "neutral".

(Reporting by Medha Singh in Bengaluru; Editing by Rashmi Aich, Krishna Chandra Eluri and Alex Richardson)

((Medha.Singh@thomsonreuters.com; +91 80 6210 0592; X, formerly Twitter: @medhasinghs;))