German shares lead falls in Europe as Lanxess plunges

German stocks led the decline among European peers on Tuesday as shares of speciality chemicals maker Lanxess plunged after lowering its forecast, while a modest interest rate cut by China failed to lift investor sentiment.

Germany’s DAX index fell 0.5% by 0709 GMT, retreating farther from a record high it hit on Friday. The continent-wide STOXX 600 index fell 0.4%.

Lanxess fell 13.3% to the bottom of the STOXX 600 after cutting its second-quarter and annual core profit forecasts, saying it saw no demand recovery in June as customers continued to destock.

The chemicals index slid 1.7%, leading sectoral falls.

China cut its key lending benchmarks on Tuesday, with investors worrying that it may be too small to jumpstart a slow economic recovery and awaited a wider stimulus package.

China-exposed luxury giant LVMH (EPA:LVMH), which is Europe’s most valuable firm, fell 0.5%, while the basic resources index dropped 0.5%.

German shares lead falls in Europe as Lanxess plunges