European stocks hit near 1-week low on global worries

European shares on Tuesday fell to their lowest in nearly a week on growing worries about rising inflation, a surge in coronavirus infections in China and the fallout of the prolonged war in Ukraine.

The pan-European STOXX 600 index .STOXX fell 1.1% by 0713 GMT, echoing weakness in Asian shares, with banks .SX7P among the worst hit, Reuters said.

Germany’s top lenders Deutsche Bank DBKGn.DE and Commerzbank CBKG.DE slumped nearly 8% after an undisclosed investor sold stakes of more than 5%, a bookrunner said.

China-exposed luxury stocks such as LVMH LVMH.PA, Kering PRTP.PA and Hermes HRMS.PA dropped in the range of 1% and 2% as China faced its worst COVID-19 outbreak in two years.

Risk appetite was further dented as U.S. yields continued to surge ahead of inflation data that is expected to show consumer prices gained the most in four decades.

Among individual stocks, Italian defence group Leonardo LDOF.MI rose 3.1% as Deutsche Bank upgraded the stock to “buy” on expectations of higher defence spending in the company’s main markets.