European shares fell on Monday, with Germany’s DAX and France’s CAC on track for their worst month in four years, hit by sliding Chinese stocks and prospects of a near-term US rate increase.

At 0805 GMT, the DAX, the CAC and the euro zone’s Euro STOXX 50 were down about 1 per cent. Volumes were likely to be thin, with British markets closed for a public holiday.

All three indexes are down about 9 percent in August so far.

“The market turmoil will continue in the near future. China is the catalyst, but the real reason for the sell-off is the nervousness about the first US rate hike,’’ Koen De Leus, senior economist at KBC in Brussels, said.

‘The underlying trend is still up, but the time of making easy money on the stock markets is over.’’

The Federal Reserve had left open on Friday the possibility of a September increase, though several of its officials said the prolonged turmoil in financial markets might delay the first policy tightening in nearly a decade.

Shanghai stocks, which have plunged more than 40 per cent since mid-June, were down about 1 per cent on Monday, while MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.4 per cent and was on track for a fall of about 10 per cent this month.

Shares in Belgian insurance company Ageas rose about 3 per cent after the company had said on Sunday it had agreed to sell its Hong Kong insurance unit to China-based asset manager JD Capital for $1.4 billion, exiting a business it acquired eight years ago.

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