Europe: Shares slide on risk-off mood after gloomy Fed view

[BENGALURU] Miners and banks led declines in European stocks, hit by a wave of selling across global markets on Thursday after the US Federal Reserve signalled a long path of recovery for the world's largest economy.

The pan-European STOXX 600 index fell 1.1 per cent to hit a 10-day low, with economically sensitive sectors such as miners, banks, automakers and oil and gas falling between 1.6 per cent and 2.9 per cent.

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 indices off their record highs.

A rise in US 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 fell 5.6 per cent after it posted a 22.4 per cent plunge in first-half core earnings on lower copper sales, but said it would pay an interim dividend.

Payments processor Adyen, which has doubled in value in the past year, slipped 2.7 per cent as it reported slower earnings growth.

Intercontinental Hotels Group rose 0.9 per cent and France's Accor gained 2.3 per cent after a French newspaper reported the hotel operators had examined a merger.

German real estate firm Tag Immobilien jumped 6.9 per cent as it confirmed its guidance for 2020 and said raising it during the year was a possibility.

REUTERS