European shares slump 1% as global risk mood sours

A fresh wave of selling hit European stock markets on Wednesday as little progress in the U.S. debt ceiling negotiations, a jump in the UK core inflation and more losses in market-heavy luxury names hurt risk sentiment.

The Europe-wide STOXX 600 index fell 1.1% by 0718 GMT to hit a nearly three-week low, with all regional markets trading in the red.

Wall Street stocks finished sharply lower on Tuesday and short-term Treasury yields advanced as investor jitters grew over a lack of progress in the U.S. debt-limit talks.


Real estate stocks fell the most in Europe, down 2.5%, with UK homebuilders among the top decliners after data showed a closely watched core measure of UK price growth surged to a 31-year high in April, cementing bets on more interest rate hikes from the Bank of England.

Luxury stocks fell 1.7% to an over six-week low as Tuesday's selloff showed no signs of abating.

Embracer plummeted 38.2% to an all-time low after the Swedish gaming group said a major strategic partnership will not materialise and also trimmed its full-year adjusted EBIT forecast.