Europe close: Investors turn a bit more cautious, China growth worries drag

European stocks were in the red on Monday amid investor caution following the previous week's big gains and regarding China’s growth prospects.

Lighter trading volumes on account of the Juneteenth national holiday in the US likely also played a hand.

The benchmark Stoxx 600 index fell back 1.02% to 462.04, while Germany’s DAX was off by 0.96% at 16,201.20.

France’s CAC 40 meanwhile slipped 1.01% to 7,314.05.

"Stocks have succumbed to a round of profit-taking in today’s session, with the moves to the downside amplified by the absence of volume thanks to the US holiday," said IG chief market analyst Chris Beauchamp.

"Becalmed by an empty calendar, markets have drifted lower, though with Powell testifying later in the week traders shouldn’t assume the dip buyers will immediately step in tomorrow."

The latest Chinese GDP projections from Goldman Sachs added to the downbeat mood, as the bank cut its growth forecasts. It argued that after a strong start in the first quarter, the country’s post-reopening recovery "appears to have fizzled out in Q2" and that government stimulus won’t be enough.

GS downgraded its 2023 full-year real GDP growth forecast to 5.4% from 6.0% and its 2024 forecast to 4.5% from 4.6%.

Amid worries about China, the Stoxx 600 basic resources index fell 2.2% to 570.2.

Elsewhere, Sartorius tumbled more than 15% after the Franco-German lab equipment maker cut its outlook for 2023.