LONDON MARKETS: Burberry, BP Keep Pressure On London Markets

By Barbara Kollmeyer, MarketWatch

MADRID (MarketWatch) -- Fears over Chinese growth drove losses for luxury-goods retailer Burberry PLC, and resource stocks such as BP PLC kept London markets from making any headway Monday.

The FTSE 100 index fell 0.6% to 5,626.01, with investors continuing to worry over global growth prospects from China and elsewhere.

Data from China on Monday showed inflation eased sharply in June as food costs cooled and industrial demand eased off. Analysts are concerned, though, about deepening deflation and other stress on the economy. Resource stocks are sensitive to economic news from China, which is a big user of natural resources.

Heavyweight BP (BP) fell 1.6% and Royal Dutch Shell PLC (RDSA) lost 1.7%. Tullow Oil PLC declined 2.4%.

Mining stocks were also pushing lower, with Anglo American PLC stumbling 2.5% and Xstrata PLC fell 2%.

Mining stocks will also be looking to the U.S. earnings-season kickoff after the close of Wall Street trading Monday, with aluminum producer Alcoa Inc. (AA) due to report.

Luxury-goods retailer Burberry PLC fell 2.3%, in step with losses for other companies in the sector across Europe. China is also an important market for high-end goods. But investors were looking at an interview with the vice president of Hengdeli Holdings Ltd. , Tan Li, who told Bloomberg News that sales of luxury watches had slowed to "single digits in recent months." Hengdeli is the retail partner of Swatch Group AG , which fell 2.7%.

Away from the main index, shares of Michael Page International PLC stumbled 4.3% after the recruiter cited difficult market conditions in an update and flat head count.