European Shares Slide Amid China Selloff

European stocks fell on Tuesday as Beijing widened a clampdown on businesses it blames for exacerbating inequality and increasing financial risk.

Asian stocks hit their lowest this year as investors fled Chinese tech stocks, bonds and currencies amid concerns over Beijing’s sweeping crackdown on companies ranging from education firms to the technology sector.

China’s top food delivery company lost nearly 18 percent in Hong Kong, on top of a 14 percent plunge the previous day as the country tightened regulations for food delivery platforms, ensuring minimum wages.

The pan European Stoxx 600 dropped 0.6 percent to 458.57 after closing flat with a negative bias on Monday. The German DAX lost 0.7 percent, France’s CAC 40 index dipped half a percent and the U.K.’s FTSE 100 was down 0.6 percent.

The British pound held firm, helped by a decline in new daily COVID-19 cases in the U.K.

Cyclicals such as banks and automakers were broadly lower.

Miners Antofagasta and Glencore dropped around 2 percent after data showed China’s industrial profits growth moderated in June.

Industrial profits increased notably by 20 percent on a yearly basis in June, but slower than the 36.4 percent growth posted in May as high commodity prices continued to squeeze the profitability of companies.

Rio Tinto declined 1.7 percent after saying it planned to cut production at its aluminium smelter in Canada due to union strikes.

Reckitt Benckiser shares plummeted 8.5 percent after the Lysol maker swung to pretax loss for the first half of the year on lower revenue and higher costs.

Online greeting card publisher Moonpig slumped 6.7 percent after saying it expects a major drop in sales in the coming months.

Daily Mirror publisher Reach Plc jumped 7.7 percent. The company said it was trading ahead of expectations and expects that strong momentum to continue.

Dutch telecom KPN advanced 1.8 percent. The company announced a share buyback program worth 200 million euros ($235 million) after posting second-quarter earnings above estimates.

Sodexo Group shares were down about half a percent. The French catering and food services group said it entered into exclusive negotiations to combine its global childcare services, including Liveli in France, with those of the Grandir group.

A two-day policy meeting of the U.S. Federal Reserve gets underway later today, with investors waiting to see how the central bank will balance fast-rising prices with the complication of increased coronavirus infections.

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