European stocks opened lower on Monday, breaking a five-week winning streak, as investor sentiment was hit by the unexpected downgrade of the U.S. credit rating and weak economic data from China.
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The pan-European STOXX 600 index fell by 0.5% as of 07:25 GMT, retreating from a seven-week high reached on Friday.
U.S. stock futures dropped by more than 1%, and yields on longer-term U.S. Treasury bonds rose after Moody’s downgraded the United States' credit rating, citing concerns over the country’s rising debt, which has reached $36 trillion.
Eurozone government bond yields also climbed.
Meanwhile, luxury goods stocks declined after China’s April retail sales data came in below expectations.
Shares in France’s Hermès, the UK’s Burberry, and Italy’s Moncler each fell by around 2%, as these European luxury brands rely heavily on China as a major market for their products.
BNP Paribas shares rose 2.4% after the French bank announced a €1.08 billion ($1.21 billion) share buyback plan.
Volkswagen shares dropped 3.1% as the German automaker’s stock traded ex-dividend.
