European stock markets retreated at the open on Monday as traders digested weak economic data out of China and fallout from the Taliban retaking control in Afghanistan.

London's benchmark FTSE 100 index dropped 0.7 per cent to 7,166.52 points.

In the eurozone, Frankfurt's DAX 30 index lost 0.7 per cent to 15,864.42 points and the Paris CAC 40 shed 0.8 per cent to 6,841.27.

Growth in China's retail sales and industrial production slowed in July, official data showed on Monday, with a rebound of COVID-19 dragging on demand in the world's second biggest economy after the US.

Weaker economic data emanating from China has spoiled the mood

In Japan, the third largest economy, the economy grew slightly as it rebounded during April-June.

Market watchers were also following developments in Afghanistan.

US troops fired shots into the air and all commercial flights were cancelled at Kabul airport on Monday as thousands of Afghans crowded onto the tarmac in the hope of catching any flight out after the weekend Taliban takeover.

“Weaker economic data emanating from China has spoiled the mood, with lower readings on retail sales and industrial production raising questions on whether the recovery momentum can be maintained,” noted Richard Hunter, head of markets at Interactive Investor.

“In addition, there remain some health issues in Asia generally, while geopolitical concerns have also surfaced following the developments in Afghanistan and the implications for the future of the region.”