(Reuters) -European shares slipped on Wednesday as utilities fell on Spain’s move to cap energy bills, while luxury stocks continued to weaken on worries about a slowing Chinese economy.

Spain’s cabinet passed emergency measures on Tuesday to reduce sky-high energy bills by redirecting billions of euros in extraordinary profits from energy companies to consumers and capping increases in gas prices.

The utilities sector tumbled 2.9%, with Europe’s biggest utility, Enel falling more than 5%. Spain’s IBEX lost 1.7%, the most among regional indexes.

The benchmark STOXX 600 index was down 0.8%, and off about 2.5% from the record high in mid-August.

Data showed China’s factory and retail sectors faltered in August with output and sales growth hitting one-year lows following fresh coronavirus outbreaks and supply disruptions.

“The headlines continue to deter foreign investor interest back into Beijing,” said Edward Moya, senior market analyst at OANDA.

“Nervousness is growing that this string of Chinese crackdowns/concerns could be the first domino to fall.”

Retail stocks slipped 2.3% on concerns over the fresh COVID-19 outbreak in China’s Fujian province and signs of tighter regulations in Macau, the world’s largest gambling hub.

French luxury goods makers LVMH and Kering fell over 4% each.

“If you consider Macau, that’s impacted the luxury goods sector in Europe. China retail sales numbers were also pretty weak,” said Keith Termperton, a sales trader at Forte Securities.

While optimism about a steady European economic recovery remains, the STOXX 600 is on course to end its seven-month winning streak in September, as investors grow anxious over global growth and monetary policy outlook.

UK stocks also came under pressure after data showed Britain’s inflation rate posted a record jump to hit a nine-year high in August.

Fashion retailer H&M fell 3.1% as quarterly sales increased less than expected, while Zara owner Inditex slipped 1.3% even as sales approached pre-pandemic levels.

Swedish Match rose 4.3% after the tobacco and nicotine products maker unveiled plans to spin off its U.S. cigar business to shareholders and list it on the stock market.

Dutch online food delivery company Just Eat Takeaway dropped 4.6% after the Financial Times reported that UK rival Deliveroo and Amazon will offer free delivery to Prime subscribers. Deliveroo gained 1.1%.

Oil stocks were the top gainers as crude prices climbed after industry data showed a larger than expected drawdown in crude oil stocks in the United States. [O/R]

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