European Stocks Close Weak As China Selloff Hurt Sentiment

European stocks ended weak on Tuesday, hurt by Beijing’s crackdown on the technology sector, and on lingering worries about the impact of the surging delta variant of the coronavirus on global economic recovery.

After recent gains, the mood turned bearish today as Beijing widened its clampdown on businesses it blames for exacerbating inequality and increasing financial risk.

Investors looked ahead to the Federal Reserve’s monetary policy announcement, due on Wednesday. The two-day monetary policy meeting of the U.S. central bank gets underway later today.

The bank is widely expected to hold rates and its asset purchase programme unchanged. Investors are likely to pay close attention to the Fed’s statement for any clues the central bank is considering scaling back its asset purchase program.

The pan European Stoxx 600 drifted down 0.54%. The U.K.’s FTSE 100 ended 0.42% down, Germany’s DAX declined 0.64% and France’s CAC 40 ended lower by 0.71%, while Switzerland’s SMI shed 0.24%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Netherlands, Norway, Poland, Portugal, Russia, Spain and Sweden ended weak.

Greece, Iceland, Ireland and Turkey closed higher.

In the UK market, Reckitt Benckiser plunged nearly 8.5% after the Lysol maker swung to pretax loss for the first half of the year on lower revenue and higher costs.

Scottish Mortgage and Intermediate Capital Group ended lower by 4.3% and 3.5%, respectively. Informa, Prudential, Legal & General Group, Aveva, Whitbread, ITV and Royal Mail also ended notably lower.

Online greeting card publisher Moonpig slumped after saying it expects a major drop in sales in the coming months.

Daily Mirror publisher Reach Plc shares moved up sharply after the company said it was trading ahead of expectations and expects that strong momentum to continue.

Croda International shares climbed 5.6%. Just Eat Takeaway gained about 3.75%. Smith (DS), Rolls-Royce Holdings, United Utilities and Smurfit Kappa Group gained 1 to 1.4%.

In the French market, WorldLine SA shares tumbled more than 8.5%. Publicis Groupe, Unibail Rodamco and STMicroElectronics lost 2.4 to 3.1%. Societe Generale, Faurecia, Valeo, Danone, Saint Gobain, ArcelorMittal, Engie and Schneider Electric declined 1 to 2%.

LVMH pared gains and ended weak. The stock moved higher early on in the session after reporting an 84% surge in second-quarter sales.

Dassault Systemes climbed nearly 3.5%, riding on a sharp jump in transport and mobility software sales, and on an upward revision in its 2021 forecasts. Atos, Michelin, Airbus Group and Veolia closed with modest gains.

In Germany, Infineon Technologies shed about 2.7%, while Volkswagen, Daimler and BMW lost 1.6 to 2.1%. Bayer, Continental and Thyssenkrupp also closed notably lower. SAP, Lufthansa and Linde closed with solid gains.

In economic news, the latest Distributive Trades Survey data from the Confederation of British Industry showed UK retail sales continued to expand in July, while orders grew the most since December 2010.

The retail sales balance came in at 23% in July, but slightly down from 25% in June. The balance was expected to fall to 21%. Meanwhile, the order book balance advanced to 49%, the highest since December 2010, from 30% in June.

The euro area money supply grew at a slower pace in June and the credit to the private sector logged a steady expansion, data from the European Central Bank revealed.

The M3 money supply rose 8.3% on a yearly basis in June, which was slower than the revised 8.5% growth posted in May. Economists had forecast M3 to grow at a slower pace of 8.2%.

At the same time, annual growth in the narrow measure M1 increased marginally to 11.7% from 11.6% in the previous month.

Data showed that the credit to the private sector registered an annual increase of 3.5%, the same rate as seen in May.