European Stocks Hit by U.S. Debt Downgrade and China Data
European stocks fell on Monday, ending a five-week gain streak, after a U.S. credit downgrade and weak Chinese economic data hurt investor sentiment. The STOXX 600 index fell 0.5%, with luxury stocks declining due to disappointing Chinese retail sales. U.S. stock futures also fell amid rising Treasury yields.
European stocks experienced a setback on Monday, ending their five-week winning streak. This decline was primarily triggered by an unexpected U.S. credit rating downgrade and disappointing economic data from China, both of which negatively impacted investor sentiment.
The pan-European STOXX 600 index fell by 0.5% by 0725 GMT, retreating from the seven-week highs reached last Friday. The downgrade by Moody's on U.S. debt, citing the country's mounting $36 trillion debt, led U.S. stock index futures to fall over 1%, while U.S. Treasury yields for longer-duration debt rose.
The decline was further reflected in euro zone bond yields and a noticeable drop in luxury stocks, as April retail sales in China did not meet expectations, affecting brands like Hermes, Burberry, and Moncler. However, there was some positive news with BNP Paribas shares rising 2.4% following their share buyback plan announcement.
(With inputs from agencies.)
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