Europe: Shares slide on Fed outlook, worries of new virus cases

[BENGALURU] European shares moved further away from their three-month peak on Thursday after a downbeat economic outlook from the US Federal Reserve and on worries of a second wave of Covid-19 cases.

The pan-European Stoxx 600 fell 2.6 per cent, its fourth straight day of decline, with travel and leisure stocks, banks and automakers losing between 4.5 per cent and 5 per cent.

A possibility of a fresh rise in US coronavirus cases dampened risk appetite, with a Reuters analysis showing infections rose slightly after five weeks of declines, partly due to more testing.

A strong rally in global stocks halted this week, with markets taking another leg lower on Thursday after the Fed warned of a long road to recovery, while projecting the US economy to shrink 6.5 per cent in 2020 and the unemployment rate to be 9.3 per cent at the year's end.

Lufthansa slumped 12.5 per cent after it admitted that positions of up to 26,000 employees are surplus to requirements, suggesting many more jobs will be cut at the German carrier.

Fiat Chrysler fell 5.3 per cent and Peugeot maker PSA 6.5 per cent after a report that the carmakers will face a lengthy European Union antitrust probe over their planned US$50 billion merger.

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REUTERS