By Samantha Conti and Amanda Kaiser
with contributions from Lara Farrar
 on August 12, 2015

LONDON — European stock markets sank on Wednesday, rattled by declines in Asian markets following China’s surprise devaluation of the yuan and fresh economic data.

The CAC 40 in Paris was down 2.9 percent to 4,949.54; followed by the DAX in Frankfurt, 2.6 percent to 10,999.32, and the FTSE MIB in Milan, 2.2 percent to 23,185.12. The FTSE 100 in London fell 1.5 percent to 6,561.83.

The euro traded at $1.10, while the pound fetched $1.56 and the Swiss franc $1.02 at 11:30 a.m. CET.

Retail and luxury stocks lost ground along with the markets, with the day’s biggest fallers including Burberry Group, 3.3 percent to 14.85 pounds; Inditex, 3.2 percent to 30.59 euros; Compagnie Financière Richemont, 3.2 percent to 78.10 Swiss francs; LVMH Moët Hennessy Louis Vuitton, 4.2 percent to 157.90 euros; Moncler, 4.2 percent to 16.78 euros; Unilever, 5 percent to 39.44 euros; Adidas, 3.1 percent to 69.14 euros, and Hugo Boss, 3.3 percent to 106.25 euros.

Asian shares were trading lower on Wednesday, extending their losses after China’s currency move on Tuesday. Hong Kong’s Hang Seng shed 2.38 percent while Tokyo’s Nikkei 225 index lost 1.58 percent.

The world’s second-largest economy devalued its currency by almost 2 percent, leading to the yuan’s biggest one-day loss in two decades on Tuesday. The currency lost more ground Wednesday. China intervened on Wednesday to prop up the yuan in the last minutes of trading, in an apparent attempt to prevent an excessive fall in the currency, The Wall Street Journal reported. The yuan jumped about 1 percent in value against the dollar in the final moments of trading, bringing it to a level where one dollar would buy 6.3870 yuan, according to the paper.

Separately, China’s National Bureau of Statistics said Wednesday that retail sales in China rose 10.5 percent in July, down slightly from the 10.6 percent growth seen in June.

Sales growth has hovered around those levels since the start of the year, coming off an average monthly growth of 11.8 percent July through December 2014.

“They didn’t really miss on retail sales by much and they are still fairly strong,” said Benjamin Cavender, a senior analyst with the Shanghai-based China Market Research consultancy. “[The 10.5 percent] growth isn’t bad, though it was below expectations. I think what we are seeing is a little bit of fallout due to the recent stock market rollercoaster, and just the reality that as China’s economy continues to grow it just isn’t possible for it to grow at the same rate it has in the past.”

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