European Stocks Take a Hit Amid China's Stimulus Uncertainties

European stocks fell to their lowest in two weeks as uncertainty over China's economic stimulus affected sectors like mining and luxury goods. The STOXX 600 index declined, with LVMH and Kering experiencing significant drops. Miners faced losses too, as China's stimulus details left markets disappointed.

European stocks plunged to a two-week low on Tuesday, driven by uncertainty surrounding China's economic stimulus measures. The STOXX 600 index fell by 0.9%, touching its lowest point since September 23, as investors in the mining and luxury sectors reacted negatively to China's lack of clear economic strategies.

Luxury brands including LVMH, Kering, and Burberry suffered losses ranging from 2.6% to 6.3%, reflecting their heavy reliance on Chinese markets. Brandy producers faced setbacks too, with proposed anti-dumping measures affecting Remy Cointreau and Pernod Ricard. The mining sector saw the steepest declines amid falling copper and iron ore prices.

Amid these financial adjustments, geopolitical tensions also weighed heavily on investor sentiment, with Middle Eastern conflicts pushing oil prices to nearly $80 per barrel. Meanwhile, a surprising rise in German industrial production did little to counter a dim euro zone economic outlook. Traders remain cautious, with expectations of further European Central Bank rate cuts this year.

(With inputs from agencies.)