Carmakers slump, lead sectoral losses
Factory activity stalls in EZ, Asia
HSBC, BP shine after results

Aug 1 Reuters European stocks slipped on Tuesday, with the German DAX pulling back from record highs as shrinking factory activity in the euro zone and China underscored growing risks to the global economy from rising interest rates.

The panEuropean STOXX 600 index was down 0.5, with carmakers, real estate and miners leading sectoral declines.

Losses accelerated across euro zone markets after a survey showed manufacturing activity in the bloc contracted in July at the fastest pace since May 2020 as demand slumped despite factories cutting their prices sharply.

There was considerable weakness seen in Germany, Europe39;s largest economy, while France and Italy, the second and thirdlargest euro zone economies, also recorded marked deteriorations since June.

Surveys earlier showed Asia39;s factory activity also shrank in July, a sign slowing global growth and weakness in China39;s economy were taking a toll on the region39;s fragile recovery.

The autoheavy German DAX fell 0.8 after touching a record high in the previous session, with shares of BMW and Mercedes Benz falling 4.4 and 1.8, respectively.

We39;re quite defensive in our sector allocation, said Joost van Leenders, senior investment strategist at Van Lanschot Kempen, warning that the impact of aggressive interest rate hikes is yet to be felt.

The cyclicals have been much stronger than the PMIs. The riskon…