European stocks fall as utilities drag, luxury slides after China data

PARIS: European shares slipped on Wednesday as utilities fell on Spain’s move to cap energy bills, while luxury stocks continued to weaken on worries about a slowing Chinese economy.

Spain’s cabinet passed emergency measures on Tuesday to reduce sky-high energy bills by redirecting billions of euros in extraordinary profits from energy companies to consumers and capping increases in gas prices.

The utilities sector tumbled 2.9%, with Europe’s biggest utility, Enel falling more than 5%. Spain’s IBEX lost 1.7%, the most among regional indexes.

The benchmark STOXX 600 index was down 0.8%, and off about 2.5% from the record high in mid-August.

Data showed China’s factory and retail sectors faltered in August with output and sales growth hitting one-year lows following fresh coronavirus outbreaks and supply disruptions.

Retail stocks slipped 2.3% on concerns over the fresh COVID-19 outbreak in China’s Fujian province and signs of tighter regulations in Macau, the world’s largest gambling hub.

French luxury goods makers LVMH and Kering fell over 4% each.

While optimism about a steady European economic recovery remains, the STOXX 600 is on course to end its seven-month winning streak in September, as investors grow anxious over global growth and monetary policy outlook.

UK stocks also came under pressure after data showed Britain’s inflation rate posted a record jump to hit a nine-year high in August.