RTTNews - The European markets fell on Monday, as a steep drop in China's main stock market raised anxiety about the pace of the global economic recovery.
The Shanghai Composite Index tumbled 6.74%, the most since June 2008, and entered a so-called bear market.
In economic news, the Institute for Supply Management - Chicago said its index of manufacturing activity rose to 50.0 in August from 43.4 in July, with a reading of 50 acting as the breakeven point versus contraction and expansion. Economists had been expecting a more modest increase to a reading of 48.0.
Meanwhile, a flash estimate from the European Union statistics office in Luxembourg showed that euro zone consumer prices dropped 0.2% in August from the previous year, Monday. Economists had expected the consumer price index to drop 0.4% in August, following a record fall of 0.7% in July.
Crude for October delivery fell $3.18 to $69.56 a barrel on the New York Mercantile Exchange, by the time the European markets closed, as China's main stock market slumped.
The FTSEurofirst 300 index of pan-European blue chips closed 0.65% lower at 972.02 points, while the narrower DJ Stoxx 50 index fell 0.43% to 2,401.57 points.
Around Europe, France's CAC index dropped 1.07% to 3,653.54 and Germany's DAX index slipped 0.96% to 5,464.61. London Market was closed for a holiday.
Economy sensitive banking stocks were among the biggest losers. BNP Paribas, France's largest bank, fell 1.7%, while Societe Generale, the second largest, declined 1% and Deutsche Bank, Germany's biggest lender, slipped 2.5%. Banco Santander, Spain's largest bank, lost 1.2%.
Shares of steelmakers lost ground after China's Baoshan Iron & Steel Co. reported a 93% drop in first-half profit and said the global economy hasn't recovered substantially. ArcelorMittal, the world's biggest steelmaker, slipped 2.8%, while ThyssenKrupp, Germany's biggest steelmaker, and Salzgitter, the second biggest, both fell 2.4%.
L'Oreal, the world's biggest cosmetics maker lost 1.2% after ING downgraded the stock to sell from hold.
Oil stocks edged lower after crude oil prices tumbled. Total, Europe's third biggest oil company, fell 0.8% and StatoilHydro, Norway's biggest, dropped 2.9%.
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