European stocks drop on concerns over global growth

The pan-European STOXX 600 declined 0.5%, with sectors tracking healthcare, chemicals and personal goods all slipping more than 1%

European stocks dropped on Thursday as mixed economic data spurred worries about global growth and offset gains in interest rate-sensitive sectors, with France's CAC 40 leading national declines.

The pan-European STOXX 600 declined 0.5%, with sectors tracking healthcare, chemicals and personal goods all slipping more than 1%.

Economic worries continued to weigh on sentiment. German industrial orders increased more than expected in July, but euro zone retail sales slid on an annual basis.

That, along with some signs of weakening in the U.S. labour market, kept investors cautious ahead of key U.S. nonfarm payrolls (NFP) data on Friday.

The industrial orders were good news for Germany but everybody right now is focused on U.S. job data. Tension in the market is growing higher into tomorrow's U.S. job report which is why we see a continued sell off in the U.S. and European stock markets, according to Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

France's benchmark index stumbled 0.9%, its third successive loss, as worries about a slowdown in top consumer China weighed on luxury stocks.

An index of luxury stocks slid more than 3%, with LVMH and Hermes International plummeting 3.6% and 6.4%, respectively.

The selection of Michel Barnier, the EU's former Brexit negotiator, as France's prime minister helped lift some bank stocks and government bonds in hopes it would soothe the country's political turmoil since President Emmanuel Macron called a snap election in June.

Having a Prime Minister is a good sign and it is going to calm nerves in the market, but this period of political uncertainty has damaged investor appetite for France, Ozkardeskaya added.

Germany's benchmark DAX index was flat. The country's Ifo Institute said the economy was likely to stagnate this year, in contrast to earlier forecasts of 0.4% growth.

The rate-sensitive utility and real estate sectors were the top gainers, both up more than 1% as investors continued to expect rate cuts this month from both the ECB and the Federal Reserve.