(Reuters) – The main European stock markets fell at the start of the session on Tuesday, weighed down by luxury goods, basic resources and spirits makers, as the optimism sparked by stimulus measures in China faded and the Asian giant has announced protectionist measures against imports of spirits from the EU.
In Paris, the CAC 40 lost 1.24% to 7,482.38 points around 07:54 GMT. In Frankfurt, the Dax fell 0.89% and in London, the FTSE 100 lost 1.21%.
The EuroStoxx 50 index is down 1.08%, the FTSEurofirst 300 is down 0.95% and the Stoxx 600 is down 0.93%.
European indices, already under pressure in recent days due to geopolitical fears and the rise in bond yields, are digesting the announcement on Tuesday by China of the establishment from October 11 of temporary protectionist measures against imports of certain categories of spirits from the European Union (EU).
The introduction of these provisional measures, which comes after the European Commission on Friday maintained its plan for additional customs duties on imports of Chinese electric vehicles, also intensifies fears that luxury will be targeted in turn, according to analysts.
“Luxury is sold because there is a fear that after brandy, it will be the turn of the luxury and automobile sector. Every time there is a change in Chinese customs regulations, there is a response negative in the sectors most exposed to exports”, notes a trader based in Milan.
The absence of new details on Chinese recovery measures also explains, according to some analysts, sales in sectors linked to the world’s second largest economy, such as basic resources and luxury, which had benefited in recent days from the announcements made through Beijing.
Core resources are falling more than 4% as copper and iron ore prices fell after initial optimism over China’s stimulus measures dissipated.
LVMH, the Hennessy cognac manufacturer, lost 4.3% and the two main French spirits manufacturers, Rémy Cointreau and Pernod Ricard, fell by 8.1% and 4% respectively.
The European luxury sector lost 2.4% and the French group Kering lost 6.6%, showing the worst performance of the CAC 40.
(Written by Diana Mandiá, edited by Blandine Hénault)
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