LONDON: Europe's major stock markets sank Wednesday as investors worried over rising coronavirus infections in several countries and fresh trade tensions between the European Union and the United States, dealers said.
Asian equities were mixed as traders weighed positive data suggesting economies are recovering against signs of a second wave of infections and the reintroduction of some lockdowns.
Yet indices across Europe dived deep into the red, while the euro edged down versus the dollar.
"Today we have the combination of rising coronavirus cases in various countries, including the US and Germany, which naturally casts doubt over the ability of countries to continue to reopen and people's willingness to ease their way back to something that resembles normal life," OANDA analyst Craig Erlam told AFP.
"Both of these are a considerable threat for businesses and employment. Add to that the trade aggression from the US towards Europe at the worst possible time... and investors are understandably unsettled."
Erlam added: "Whether that lasts is another thing. The (economic) stimulus trade is powerful as we have seen repeatedly."
While governments and central banks have provided a wall of cash to support markets, investors are nevertheless walking a tightrope between hopes the easing of restrictions will lead to a rebound and the possibility that the relaxation will inflame the pandemic again.
After a rally across most of Asia on Tuesday, Wall Street and Europe followed suit after figures pointed to a big improvement in eurozone private-sector activity in June as well as a jump in US new home sales.
Meanwhile, several countries continued to loosen up, including in Britain where pubs, restaurants, hotels and cinemas were told they could open again from July 4.
There are however growing concerns of a relapse in some countries, with Tokyo governor Yuriko Koike warning a number of new cases had been found at one workplace.
That comes after Germany reimposed containment measures in two western districts -- home to almost 640,000 people -- after an outbreak at a slaughterhouse infected more than 1,500 workers.
Portugal has also announced new restrictions in and around Lisbon.
"Reopening optimism is showing signs of fading," noted City Index analyst Fiona Cincotta.
"Coronavirus news has been far from good on a global scale.
"Several states in the US continue to see record daily rises, whist the death toll in South America has topped 100,000. Yet investors assume that there is a small chance of a second lockdown on the scale of what we have just experienced." - Key figures around 1115 GMT - London - FTSE 100: DOWN 2.2 percent at 6,183.08 points Frankfurt - DAX 30: DOWN 2.0 percent at 12,277.73 Paris - CAC 40: DOWN 1.6 percent at 4,937.66 Madrid - IBEX 35: DOWN 1.5 percent at 7,330.10 Milan - FTSE Mib: DOWN 1.5 percent at 19,553.96 EURO STOXX 50: DOWN 1.7 percent at 3,242.67 Tokyo - Nikkei 225: DOWN 0.1 percent at 22,534.32 (close) Hong Kong - Hang Seng: DOWN 0.5 percent at 24,781.58 (close) Shanghai - Composite: UP 0.3 percent at 2,979.55 (close) New York - Dow: UP 0.5 percent at 26,156.10 (close) West Texas Intermediate: DOWN 1.6 percent at $39.73 per barrel Brent North Sea crude: DOWN 1.2 percent at $42.12 per barrel Euro/dollar: DOWN at $1.1302 from $1.1308 at 2100 GMT Dollar/yen: FLAT at 106.52 yen Pound/dollar: DOWN at $1.2499 from $1.2520 Euro/pound: UP at 90.41 pence from 90.32 pence