(Reuters) – European stocks fell on Wednesday as utilities fell following Spain’s decision to cap energy bills, while luxury stocks continued to weaken amid concerns about the slowdown of the Chinese economy.
The Spanish cabinet adopted emergency measures on Tuesday to reduce skyrocketing energy bills by redirecting billions of euros in extraordinary profits from energy companies to consumers and capping increases in gas prices.
The utilities sector fell 2.9%, with Europe’s largest utility, Enel, losing more than 5%. The Spanish IBEX lost 1.7%, the largest among regional indices.
The benchmark STOXX 600 index was down 0.8%, and about 2.5% from the record high in mid-August.
Data showed China’s factory and retail sectors weakened in August, with production and sales growth reaching year-over-year lows following new coronavirus outbreaks and supply disruptions. .
“Headlines continue to deter foreign investors from returning to Beijing,” said Edward Moya, senior market analyst at OANDA.
“Nerves are growing that this round of Chinese repressions / concerns could be the first domino to fall.”
Retail inventories fell 2.3% amid concerns over the new COVID-19 outbreak in China’s Fujian Province and signs of tighter regulations in Macau, the world’s largest gaming hub.
French luxury goods makers LVMH and Kering fell more than 4% each.
“If you consider Macau, it has had an impact on the luxury goods sector in Europe. The retail sales figures in China were also quite weak, ”said Keith Termperton, trader at Forte Securities.
While optimism for a stable European economic recovery remains, the STOXX 600 is on track to end its seven-month winning streak in September as investors increasingly worry about global growth and the outlook for monetary policy.
British stocks also came under pressure after data showed Britain’s inflation rate jumped to a nine-year high in August.
Fashion retailer H&M fell 3.1% as quarterly sales rose less than expected, while Zara owner Inditex fell 1.3% even as sales approached pre-market levels. pandemic.
Swedish Match rose 4.3% after the tobacco and nicotine maker announced plans to sell its US cigar business to shareholders and go public.
Dutch online food delivery company Just Eat Takeaway fell 4.6% after the Financial Times reported that British rival Deliveroo and Amazon would offer free delivery to Prime subscribers. Deliveroo gained 1.1%.
Oil inventories were the main gainers as crude prices surged after industry data showed a larger-than-expected decline in crude oil inventories in the United States. [O/R]
Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta and Emelia Sithole-Matarise