European equities moved lower on Wednesday, reacting to sharp falls on Asian stocks markets after the Chinese government tripled the stamp duty payable on share trading.
The move by China, aimed at trying to cool its overheating financial markets, drove the Shanghai Composite 6.5 per cent lower. China's H share market - Hong Kong-listed shares of mainland companies - had a milder reaction, falling just 2 per cent to 10,403.44.
Contagion to other markets was limited since, although tripled, the share duty only rose from 0.1 per cent to 0.3 per cent. Most concerns centred on the unexpected nature of the move and the possibility of further cooling measures.
"Though the actual effect of the duty adjustment is not large, it will likely discourage speculation in the stock market psychologically," said Masafumi Yamamoto at Nikko Citigroup.
Back in Europe, the FTSE Eurofirst 300 fell 0.7 per cent to 1,590.43, Frankfurt's Xetra Dax shed 0.8 per cent to 7,721.72, the CAC 40 in Paris lost 0.8 per cent to 6,010.57 and London's FTSE 100 slipped 0.7 per cent to6,558.2.
Fallers with the greatest exposure to China included luxury goods groups. Richemont, the Swiss watch maker whose strong first-quarter profit growth was partly thanks to consumer strength in China, fell 1.4 per cent to SFr73.30.
Christian Dior shed 1.5 per cent to EU95.46, while LVMH, which is also targeting growth in China, fell 1.8 per cent to EU85.90.
Spanish construction group FCC fell 2.4 per cent to EU73.20 over disappointment that its Realia property joint venture prices its initial public offering at EU8.80, only midway between the indicative range of EU7.90-EU9.70.
Oil companies were lower following recent falls in crude prices. Sentiment in the sector was further damped by weaker-than-expected first-quarter results from Norway's Statoil (NYSE:STO).
The company, which is taking over the oil production assets of domestic rival Norsk Hydro, reported a 23 per cent fall in core earnings due to losses at its natural gas operations. The shares fell 1.5 per cent to NKr164.
Meanwhile, Austria's OMV, which reported the temporary closure of one of its Petrom refineries in Romania due to environmental concerns, fell 4.7 per cent to EU48.14.
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