European stocks slide after Chinese markets decline, Reckitt marks worst day in 18 years

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For Sruthi Shankar and Shreyashi Sanyal

Jul 27 (Reuters) – European equities lost ground on Tuesday, following declines in Chinese stocks and Reckitt Benckiser’s warning of margins ahead of earnings reports from large luxury retailers for the day.

* The pan-European STOXX index fell 0.5% in its second consecutive session of declines.

* Concerns about tighter regulation of China’s tech sector fueled a selloff in global markets this week, despite optimism about the current earnings season in the United States and Europe.

* The Dutch company Prosus, which has a stake in Chinese tech giant Tencent, fell 7.2% to its lowest level since May 2020, after Chinese stocks fell to multi-month lows.

* Reckitt, the maker of Lysol, sank 8.4% and posted its worst day since February 2003, as it joined other major consumer goods companies with a warning that its margins will shrink this year due to the highest costs.

* “For years, the market has assumed that large consumer goods companies had such strong brands that it was easy to pass on any additional costs to the customer in the form of higher prices,” said Danni Hewson, financial analyst at AJ Bell. “Unilever recently showed that this was not the case, and now Reckitt has also thrown cold water on that theory.”

* Most European sectors were down, with tech stocks leading the falls. Shares of Swiss computer equipment maker Logitech fell 9.9% after maintaining its full-year targets, despite reporting better-than-expected quarterly results.

* Investors await earnings reports from US tech companies later in the day, as well as the Federal Reserve’s decision on interest rates and the economic outlook at the end of its two-day monetary policy meeting on Wednesday. .

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