FRANKFURT: European stocks slumped to a one week-low on Wednesday as a surge in coronavirus cases and news that US was weighing tariffs on European products dashed investors hopes of a speedy economic recovery.
The pan-European STOXX 600 closed 2.8% lower, recording its second worst fall this month. Economically sensitive cyclical sectors such as travel & leisure, automakers, oil & gas and banks led declines, falling between 3.7% and 4.7%.
Germany's DAX slumped 3.4% even as the Ifo institute's survey showed the strongest rise ever recorded in the country's business morale in June.
The top decliner on the STOXX 600 was scandal-hit Wirecard, which plunged 28.3% after a slew of negative reports.
Among the few bright spots, Austrian sensor maker AMS rose 6% after JPMorgan upgraded the stock to "overweight" from "neutral", while Dialog Semiconductor jumped 6.4% after raising its quarterly revenue outlook.
Sweden's Evolution Gaming Group AB fell about 6% after it offered to buy NetEnt AB for 19.6 billion Swedish crowns ($2.12 billion). NetEnt's shares jumped 33%.
Many US states saw record daily increases in Covid-19 infections amid easing of lockdowns, while a media report that European Union countries are prepared to bar entry to Americans raised worries of fresh restrictions.
Further adding to woes, the United States may modify duties on a range of EU products and was weighing tariffs on other products from Britain, France, Spain and Germany that have an approximate value of $3.1 billion, according to the Office of the US Trade Representative.
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