European shares slide on risk-off mood after gloomy Fed view - Metro US

European shares slide on risk-off mood after gloomy Fed view

The German share price index DAX graph is pictured at the stock exchange in Frankfurt

(Reuters) – Miners and banks led declines in European stocks, hit by a wave of selling across global markets on Thursday after the U.S. Federal Reserve signalled a long path of recovery for the world’s largest economy.

The pan-European STOXX 600 index <.STOXX> fell 1.1% to hit a 10-day low, with economically sensitive sectors such as miners <.SXPP>, banks <.SX7P>, automakers <.SXAP> and oil and gas <.SXEP> falling between 1.6% and 2.9%.

The Fed minutes showed that policymakers were doubtful of a quick economic rebound and may stick with aggressive stimulus measures for a much longer period, driving Wall Street indexes off their record highs.

A rise in U.S. weekly jobless claims to above 1 million also added to the downbeat sentiment.

Meanwhile in Europe, worries over a pick-up in coronavirus cases kept investors on edge. Britain recorded its second-highest daily total of new virus cases since June 21, while Germany has also seen cases accelerating in recent weeks.

“The impact of this (rise in COVID-19 cases) is not yet evident in the official economic data, but the high frequency figures show a clear flattening of activity – this will undoubtedly come through in the data,” Derek Halpenny, head of research for global markets EMEA at MUFG, wrote in a note.

A preliminary survey of European purchasing managers is due to be released on Friday. The numbers are likely to show the pick-up in business activity stagnated in August after a rebound in July.

A full bounceback from the euro zone’s deepest recession on record will take two years or more, a Reuters poll showed, with economists saying there is a high risk of the job recovery reversing by the end of 2020.

Among individual stocks, Chilean miner Antofagasta <ANTO.L> fell 5.6% after it posted a 22.4% plunge in first-half core earnings on lower copper sales, but said it would pay an interim dividend.

Payments processor Adyen NV <ADYEN.AS>, which has doubled in value in the past year, slipped 2.7% as it reported slower earnings growth.

Intercontinental Hotels Group <IHG.L> rose 0.9% and France’s Accor <ACCP.PA> gained 2.3% after a French newspaper reported the hotel operators had examined a merger.

German real estate firm Tag Immobilien <TEGG.DE> jumped 6.9% as it confirmed its guidance for 2020 and said raising it during the year was a possibility.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur and Jan Harvey)

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