Europe open: China share slump, Reckitt weigh on stocks
European stocks fell at the open on Tuesday as sharp falls in Hong Kong and Shanghai dragged on sentiment along with below-par quarterly sales from Reckitt Benckiser.
The pan-European STOXX index fell 0.52% in early trade with all major regional bourses lower.
Fears of stricter regulation of China’s heavyweight technology sector have fuelled a selloff in global markets this week, despite optimism about US and European earnings season as a measure of progress from the Covid pandemic.
“The clampdown on various sectors within the Chinese economy that rely on overseas investment has seen a flight of capital out of Chinese stocks, particularly those with overseas listings, raising concerns as to what other sectors might be next,” said CMC Markets analyst Michael Hewson.
In equity news Lysol maker Reckitt tumbled 7.39% as easing demand for its soaps and cold remedies led the company to miss analysts’ estimates for quarterly sales.
Dutch tech investor Prosus, which has a stake in China tech giant Tencent, slumped 8.4%, hitting new lows since May 2020, weighed down by the selloff in Hong Kong and mainland China shares.
Shares in Croda International topped the Stoxx with a gain of 5% as the speciality chemicals company said it expected annual profit to be well ahead of expectations after reporting record results for the first half.
The world’s biggest luxury goods group LVMH inched up after posting higher sales and profits.