Europe open: Stocks fall as investors fret over China outlook

European stocks fell in early trade on Monday as investors fretted about China’s growth prospects.

At 0915 BST, the benchmark Stoxx 600 index, Germany’s DAX and France’s CAC 40 were all down 0.5%.

Richard Hunter, head of markets at Interactive Investor, said: "Investors paused for breath after an exhausting few days and ahead of a long weekend, with each of the main indices dipping slightly but finishing in positive territory for the week.

"Asian markets kicked off the week in subdued fashion, as investors erred on the side of caution after the previous breathless week. The Nikkei index came off the recent highs achieved on Friday, when the Bank of Japan’s decision to leave its accommodative monetary policy intact led to more buying interest, However, the current centre of investor concerns continues to be China, where hopes are still increasing for stimulative intervention by the authorities, although the lack of any announcements last week resulted in a wave of disappointment.

"The People’s Bank of China is largely expected to cut prime loan interest rates tomorrow, which would add to a reduction last week in the medium-term loan rates. At the same time, growth projections are being cut across the region, as the initial optimism from an earlier year economic bounce following reopening have faded fast. The more recent economic data have pointed to blockages in the property market, while the consumer and youth unemployment are also giving cause for concern."

Amid worries about China, the Stoxx 600 basic resources index fell 1.2% to 576.13.

Elsewhere, Sartorius tumbled 14% after the Franco-German lab equipment maker cut its outlook for 2023.