European stocks touch their lowest level in two months after weak Chinese data

European stocks touched a two-month low on Wednesday after weak economic data from China fueled fears of a global slowdown and dashed optimism from signs of falling inflation in some major eurozone economies.

The pan-European Stoxx 600 index fell 0.7 percent, its lowest since March 31.

The main stock exchanges in the region are heading towards recording monthly losses, and the FTSE 100 index in the London Stock Exchange and the CAC 40 index in the Paris Stock Exchange were among the most affected indices. Both indexes fell to their lowest level in two months also on Wednesday.

The index of auto manufacturers and the index of industrial goods and services, both affected by what is happening in China, led the losses of sub-indices in Europe after data showed that factory activity in the Asian country contracted more than expected in May due to weak demand. China is Germany’s main trading partner.

Contrary to the pessimistic data, figures showed that the inflation rate in France fell more than expected in May, and price pressures eased in the German state of North Rhine-Westphalia this month.

Shares in troubled Swedish real estate firm SBB fell 7.6 percent, hitting a seven-year low.