European shares slide as China Evergrande's troubles cast shadow



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* Fears of contagion sparked by China Evergrande crisis

* Mining stocks sink 3% as metal prices fall

* Germany's DAX begins trading with 40 constituents

* All eyes on major central bank meetings this week

* Defensive utilities, healthcare stocks post smallest declines

By Shreyashi Sanyal

Sept 20 (Reuters) - European shares tumbled on Monday as growing solvency worries about property group China Evergrande spooked investors, in a dour start to a week packed with meetings of major central banks.

The pan-European STOXX 600 index .STOXX was down 1.7%, with mining stocks .SXPP plunging 3.6% on a slide in commodity prices.

Asian equities ended sharply lower following a torrid session for China Evergrande Group 3333.HK , the world's most indebted property developer.

"More significant from the perspective of world markets is the concerning situation with huge Chinese property developer Evergrande, which appears to be teetering on the precipice with concerns about contagion from the situation infecting the wider economy in China. This is particularly bad news for miners," said Russ Mould, investment director at AJ Bell.

The benchmark European STOXX 600 has declined for three straight weeks on worries about slowing global growth, soaring inflation, persistently high COVID-19 cases and the spillover from tighter regulation of Chinese firms.

The U.S. Federal Reserve's policy meeting on Tuesday and Wednesday is in focus as the central bank is expected to lay the groundwork for a trimming of its massive pandemic stimulus. Overall, 16 central banks are scheduled to hold meetings this week, including in the UK, Norway, Switzerland and Japan.

"Expectations are growing the U.S. central bank will start laying out the groundwork for a tapering of bond purchases, potentially tee-ing up for a November kick-off," said Fiona Cincotta, senior financial markets analyst at City Index.

German shares .GDAXI fell 2.3% as data showed a bigger-than-expected jump in producer prices last month.

In its biggest ever overhaul, the blue-chip German index began trading on Monday with an increase in the number of constituents to 40 from 30.

China-exposed luxury stocks such as LVMH LVMH.PA , Kering PRTP.PA , Hermes HRMS.PA and Richemont CFR.S fell between 1.3% and 3.2%, extending sharp losses from last week.

Meanwhile, Europe's fear gauge .V2TX jumped to a near eight-month high.

Daimler AG DAIGn.DE shed 3.1% as a report cited the chief of its truck division, the world's largest, as saying the unit had seen the supply of crucial chips tighten further in recent weeks.

Lufthansa LHAG.DE rose 5.5% after saying it expects to raise 2.14 billion euros ($2.51 billion) to pay back part of a state bailout that Germany's top airline received during the coronavirus crisis.

All major European subindexes were lower, with banks .SX7P tumbling 4.3%, while utilities .SX6P , food and beverage .SX3P and real estate .SX86P posted the smallest declines.
Reporting by Sagarika Jaisinghani and Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur, Sriraj Kalluvila and Giles Elgood

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