European Stocks Drop on China Data
European stocks dropped on Wednesday as investors reacted to weaker-than-expected economic data from China. The Stoxx Europe 600 Index fell 0.7%, with all 19 industry groups declining. Luxury stocks were among the worst performers, led by a 3.3% drop in LVMH.
China Data Disappoints
China’s industrial production and retail sales both grew at a slower-than-expected pace in June. Industrial production rose 6.3% from a year earlier, missing the median estimate of 8.5%. Retail sales increased 9.8%, compared with the median estimate of 11.5%.
The data suggested that the world’s second-largest economy is still struggling to recover from the coronavirus pandemic. The slowdown in China’s economy has weighed on global markets, as investors worry about the impact of the pandemic on global growth.
Luxury Stocks Suffer
Luxury stocks were among the worst performers on Wednesday, as investors worried about the impact of the slowdown in China’s economy on the sector. LVMH, the world’s largest luxury goods company, dropped 3.3%, while Kering SA fell 2.7%.
The luxury sector has been hit hard by the pandemic, as consumers have cut back on spending on luxury goods. The sector has also been hurt by the decline in tourism, as many luxury goods are purchased by tourists.
Other Sectors Also Decline
The Stoxx Europe 600 Index fell 0.7%, with all 19 industry groups declining. Banks were among the worst performers, with the Stoxx Europe 600 Banks Index dropping 1.3%.
The energy sector was also weak, with the Stoxx Europe 600 Oil & Gas Index falling 1.2%. Oil prices dropped on Wednesday, as investors worried about the impact of the slowdown in China’s economy on global demand.
European Markets Mixed
European markets were mixed on Wednesday, with the German DAX Index falling 0.7%, while the French CAC 40 Index rose 0.2%. The UK’s FTSE 100 Index was little changed, rising 0.1%.
Outlook
Investors remain concerned about the impact of the coronavirus pandemic on global growth. The slowdown in China’s economy has weighed on global markets, and the weak economic data from China on Wednesday has added to those concerns.
The luxury sector has been hit hard by the pandemic, as consumers have cut back on spending on luxury goods. Banks and energy stocks have also been weak, as investors worry about the impact of the pandemic on global demand. European markets were mixed on Wednesday, with the German DAX Index falling and the French CAC 40 Index rising.