Bloomberg - - European stocks slid the most in one month as China s real estate crackdown and worries ahead of this week's Federal Reserve meeting fueled risk-off sentiment.
The Stoxx Europe 600 index fell as much as 1.7%, the lowest since Aug. 19 and has reached the highest level since July 21. Basic resources shares slid the most, with the sub-index down 3.3% as iron ore strew deepened and base metals fell. The DAX slumped 2% the day index rebalancing takes effect, with banks and automotive shares underperforming.
On Monday, growing investor angst about China's real estate crackdown rippled across markets, pummeling Hong Kong developers. However, Kairos Partners portfolio manager Alberto Tocchio does not think there will be a contagion effect on other continents.
A correction was expected and is healthy after one of the largest uninterrupted rallies in history, which will ultimately resume, said Tocchio. Other factors that diminish investor confidence in the near-term include inflation and the slowdown in economic growth, he said.
The Stoxx 600 has been recovering from a record high reached in August as investors focus on those concerns. All eyes are on Wednesday s Fed Policy Statement with officials expected to make a move toward scaling back stimulus.
The Fed, Bank of England and Bank of Japan will all update their policy this week and will calibrate their message very carefully to not unnerve investors further, said Ian Williams, an economics and strategy analyst at Peel Hunt.
The European benchmark gauge was 1.6% lower at 8:50 a.m. in London, as at January 2.
Among the biggest individual movers, Anglo American plc rose as much as 7.8%, while Deutsche Lufthansa AG rose 2.7% after announcing plans to raise 2.14 billion euros $2.5 billion to repay part of a German government bailout. Meanwhile, luxury stocks including LVMH and Kering SA declined amid persistent worries over China's slowing growth.