LONDON: European shares ended lower on Tuesday, tracking declines in global stock markets with business expansion data for May renewing investor concerns over slowing economic growth and monetary policy tightening.

The pan-European STOXX 60 index closed 1.1% down, giving back almost all of Monday’s gains.

PMI data showed euro zone business growth slowed this month and a shortage of raw materials held back expansion in manufacturing, adding to worries over global growth.

Europe’s largest economy, Germany, meanwhile, remains on the growth path helped by a sustained rebound in services, although demand outlook looks bleak amid inflation and supply issues. German shares gave up 1.8%.

“The clouds are packing above the eurozone economy,” said Bert Colijn, senior economist, Eurozone at ING. “And the question is really how long the service sector can continue to profit from consumers… when we also see that purchasing power is under extreme pressure due to high inflation.” “Inflationary pressures are barely abating and... this is a warning that it is likely to remain quite hawkish for the European Central Bank,” he said, signalling a period of sustained pressure for stocks.

All major sectors posted broad declines, with luxury stocks and retailers in the lead, which take a hit when disposable income is squeezed.

The French index, packed with luxury stocks, slumped 1.7%, the top decliner among regional peers.