Frankfurt (Reuters) - Disappointing economic data from China put the brakes on Europe's stock markets at the start of the week.

The Dax fell by up to 0.6 percent to 16,003 points on Monday, but defended the psychologically important 16,000-point mark. Its European counterpart, the EuroStoxx50, fell by around one percent to 4,353 points. "The pace of growth in China continues to slow," said portfolio manager Thomas Altmann from asset manager QC Partners. "The great revival after the end of the strict Covid regulations has come to an end for now."

The Chinese economy's recovery from the coronavirus pandemic lost considerable momentum in the second quarter due to weak demand. GDP only grew by 0.8% from April to June compared to the previous quarter. This clearly fell short of the first quarter's result of 2.2 percent. "The data signals that China's post-corona boom is clearly over," said economist Carol Kong from the Commonwealth Bank of Australia. "We are seeing a weak and faltering recovery."

However, investors should not be overly pessimistic about the Chinese economic figures, stated Naeem Aslam, chief investor at asset manager Zaye. This is because China's central bank is fully committed to a growth-oriented policy and is implementing the right measures to stimulate growth. "Yes, the numbers are weak today, but policymakers are not pessimistic as they continue to reassure international market participants that good days lie ahead."

In view of the weakening economy in the People's Republic, Goldman Sachs analysts expect further targeted support measures in the coming months, particularly in the areas of finance, real estate and consumption. However, the economic stimulus package is likely to be smaller than previous aid packages.

DOLLAR REMAINS UNDER PRESSURE - OIL PRICE FALLS

After the biggest weekly fall this year, the battered dollar remained under pressure. The dollar index fell by 0.2 percent at its peak to 99.7530, close to its 15-month low. The euro, on the other hand, advanced by up to 0.2 percent to 1.1248 dollars, its highest level in more than 16 months. The dollar is being hit particularly hard by speculation that interest rate hikes in the USA will soon come to an end.

The weak Chinese economic data also affected the price of oil on the commodities market. Brent crude oil from the North Sea and US light oil WTI both fell by more than 1.5 percent to 78.63 dollars and 74.15 dollars per barrel respectively. The slowdown in growth in the People's Republic fueled concerns about demand from the world's second-largest oil consumer. "GDP fell short of expectations and will therefore do little to dispel concerns about the Chinese economy," said Warren Patterson, commodities expert at financial institution ING.

LUXURY STOCKS TAKE A HIT - CRONES IN DEMAND

The China data also affected luxury companies. The luxury brand groups LVMH and Hermes in Paris and Moncler in Milan each lost more than four percent. The mood was also dampened by a temporary slump of around ten percent in the share price of Swiss industry heavyweight Richemont. Sales of jewelry, expensive watches and luxury fashion in Asia, the region with the highest turnover, rose sharply. However, the upturn was slowed by continued subdued demand on the American continent, with the result that the Group's figures fell short of expectations.

Krones, on the other hand, benefited from upwardly revised targets. The shares of the beverage bottling equipment manufacturer rose by around five percent, pushing them to the top of the MDax small cap index. An increased forecast and a lower operating loss than expected also boosted TomTom. The shares of the Dutch provider of navigation devices and digital maps rose by more than eleven percent in Amsterdam. The group thus headed for its biggest daily gain in a year.

(Report by Stefanie Geiger, edited by Christian Götz. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets)