(Bloomberg) -- European stocks slid the most in a month as China’s real estate crackdown and worries ahead of this week’s Federal Reserve meeting fueled risk-off sentiment.

The Stoxx Europe 600 index fell as much as 1.7%, the most since Aug. 19 and hitting the lowest level since July 21. Basic resources shares declined the most, with the sub-index down 3.3% as iron ore’s rout deepened and base metals fell. Germany’s DAX slumped 2% on the day the index’s rebalancing takes effect, with banks and automotive shares underperforming. 

Growing investor angst about China’s real estate crackdown rippled through markets on Monday, pummeling Hong Kong developers. However, Alberto Tocchio, a portfolio manager at Kairos Partners, doesn’t think there will be “a contagion effect” on other continents.

“A correction was due and is healthy after one of the biggest uninterrupted rallies in history, which will eventually resume,” Tocchio said. Other factors denting investor confidence in the near-term include inflation and the slowdown in economic growth, he said.

The Stoxx 600 has been retreating from a record high reached in August as investors focus on those concerns. All eyes will be on Wednesday’s Fed policy statement, with officials expected to signal a move toward scaling back stimulus.

“The Fed, Bank of England and Bank of Japan all provide policy updates this week and will calibrate their message very carefully in order not to unnerve investors further,” said Ian Williams, an economics and strategy analyst at Peel Hunt.

The European benchmark gauge was 1.6% lower as of 8:50 a.m. in London.

Among the biggest individual movers, Anglo American Plc fell as much as 7.8%, while Deutsche Lufthansa AG rose 2.7% after announcing plans to raise 2.14 billion euros ($2.5 billion) to repay part of a German government bailout. Meanwhile, luxury stocks including LVMH and Kering SA declined amid persistent worries over China’s slowing growth.

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