European shares fall on fears of Covid-19 spread in China

European shares tumbled on Tuesday, with commodity-linked sectors leading losses, amid concerns over a jump in coronavirus cases in China adding to jitters ahead of a much-anticipated rate hike in the United States.

The pan-European STOXX 600 index closed down 0.28% at 435.12 points after rising in the last two sessions, as hopes of progress in Russia-Ukraine peace talks helped sentiment.

Miners lost 2.1% and oil and gas stocks lost 0.1% as oil prices fell more than 7% and industrial metals fell on concerns about demand from China, a major consumer, after an increase in cases of Covid-19.

“Sectors exposed to China – raw materials, mining and metals, residential construction and luxury equities – are moving in part due to restrictions imposed in some parts of China,” said Nick Nelson, European equity strategist at UBS.

The Federal Reserve, meanwhile, is widely expected to kick off a rate hike cycle on Wednesday with a 0.25 percentage point increase as market participants raise the stakes on how far borrowing costs will go. may rise in the face of rising inflation.

• In London, the Financial Times index dropped 0.25%, to 7,175.70 points;
• In Frankfurt, the DAX index fell 0.09% to 13,917.27 points;
• In Paris, the CAC-40 index lost 0.23%, at 6,355.00 points;
• In Milan, the Ftse/Mib index appreciated by 0.31%, at 23,499.86 points;
• In Madrid, the Ibex-35 index registered an increase of 0.02%, to 8,236.10 points;
• In Lisbon, the PSI20 index depreciated by 0.16%, to 5,565.44 points.