European Stocks Fall On Shock China Devaluation

(RTTNews) - European stocks were generally weaker Tuesday, with German shares getting hammered by news that China has devalued its currency.

The bank set the value of yuan at 6.2298 a dollar, 1.9 percent lower than Monday's official fixing rate. This was the biggest one-day loss since 1994, when it unified official rate with market rates.

Export stocks with exposure to China, mainly auto stocks and luxury goods, retreated in response to the move.

That said, investors also felt some relief after Greece early Tuesday reached an agreement with its creditors over the terms of the third bailout. There are minor details yet to be resolved.

The deal will likely unlock around 86 billion euros loans for Greece. The agreement has to be passed by parliament this week.

The Euro Stoxx 50 index of eurozone bluechip stocks lost around 2 percent.

The German DAX declined 2.68 percent and the French CAC 40 decreased 1.86 percent, while the FTSE 100 index of the U.K. lost 1.01 percent.

In Frankfurt, Daimler and BMW declined about 5 percent each.

Luxury stocks were also hit hard on worried about demand from China. Ferragamo, Coach and Tod all declined.

Manz fell sharply after reporting first-half results.

Prudential, which reported first-half results, was down 1.4 percent.

SIG, a distributor of specialist building products, fell. The company reported first-half results that showed a decline in revenues.

Human resource provider Adecco declined 4.4 percent after reporting second-quarter results.

Meanwhile, Konecranes surged over 15 percent in Helsinki, following a definitive business combination agreement with Terex Corp.

On the data front, German economic confidence deteriorated sharply to a nine-month low in August, survey data from the Mannheim-based Centre for European Economic Research or ZEW revealed.

The economic confidence index dropped unexpectedly by 4.7 points to 25 in August, the lowest score since November 2014. It was expected to rise to 31.9.