STOXX 600 falls 1.2
Yellen begins China visit
German industrial orders rose more than expected
Embracer drops after discounted share issue

July 6 Reuters European shares slumped on Thursday, as heightened concerns about an economic slowdown and further rate hikes globally dented risk sentiment, while shares of Embracer group slid after a discounted share issue.

The panEuropean STOXX 600 index dropped 1.2, led by losses in travel and leisure and retail index, which fell 2.3 and 2.0, respectively.

France39;s CAC 40 also declined 1.6.

Embracer, the top loser on the STOXX, fell 13.8 after the gaming group raised 2 billion crowns 182 million in a share issue directed to institutional investors.

The market had been thinking it was going to get only a 25 basis point hike in July, but now there39;s a real fear that it could get at least two more, possibly three, before hawkish FOMC members are confident that inflation is finally heading lower, said Stuart Cole, chief macro economist at Equiti Capital.

Now the gap between the two main central banks is closer than two months ago as Fed has moved more towards the position of the European Central Bank ECB.

Fed minutes on Wednesday showed that a united central bank agreed to hold rates steady at the June meeting to buy time and assess need for further rate hikes, even as the vast bulk expected they would eventually need to tighten policy further.

Meanwhile, U.S. Treasury Secretary Janet Yellen39;s first trip to China…