BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European markets ended sharply lower on Wednesday as rising coronavirus cases across the globe, and mounting worries about growth after the International Monetary Fund lowered its forecast for the global economy hurt sentiment and triggered heavy selling across the board.
Markets were also weighed down by trade concerns after reports said the U.S. is considering tariffs on over $3 billion of exports from the U.K., France, Spain and Germany. Investors were also reacting to reports that the European Union is mulling a ban on American travellers when it reopens its borders on July 1.
The pan European Stoxx 600 tumbled 2.78%. Among the major indices, the U.K.'s FTSE 100 plunged 3.11%, Germany's DAX shed 3.43% and France's CAC 40 declined 2.92% and Switzerland's SMI ended lower by 2.19%.
Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Greece, Ireland, Netherlands, Norway, Poland, Portugal, Spain and Sweden lost 1 to 4%, while Turkey closed lower by about 0.7%.
In the U.K. market, TUI, IAG, Carnival, Whitbread, Meggitt, Kingfisher, Easyjet, Kingfisher and Smith & Nephew lost 6 to 8.5%. Rolls-Royce Holdings, BAE Systems, Royal Dutch Shell, BP, Barclays, British American Tobacco, Diageo, Vodafone and Royal Bank shed 3 to 5.8%.
In the German market, Wirecard plunged more than 28%, falling again after rebounding in the previous session after three successive days of losses.
Thyssenkrupp declined nearly 8%. Daimler, Deutsche Bank, Volkswagen, Fresenius, Lufthansa, SAP, HeidelbergCement, BMW, Bayer and Adidas lost 3 to 6%.'
In France, ArcelorMittal, Renault, Sodexo, Peugeot, Airbus, Safran, Technip, BNP Paribas, Essilor, Societe Generale, Credit Agricole, Publicis Groupe, Micheli and Carrefour lost 3 to 7%.
White House health advisor Dr. Anthony Fauci warned Tuesday that parts of the U.S. are beginning to see a 'disturbing surge' of Covid-19 cases. Fauci told Congress that the next two weeks would be critical in trying to keep the virus under control.
The International Monetary Fund today forecast a deeper recession for this year and a slower and uncertain recovery for next year after the coronavirus, or Covid-19, pandemic plunged the global economy into a crisis like no other.
The IMF predicts that the global economy will shrink 4.9% this year, significantly worse than the 3% drop it had estimated in its previous report in April. It would be the worst annual contraction since immediately after the Second World War.
For the United States, the IMF predicts that gross domestic product will fall as much as 8% this year, even more than its April estimate of a 5.9% drop. That would be the most severe recession since the Great Depression of the 1930s.
The growth forecast for next year was lowered to 5.4 percent from 5.8 percent. Consumption is expected to strengthen gradually next year and investment to firm up, but both are projected to remain subdued.
The IMF has forecast that Germany, France and the U.K. will see their outputs fall by 7.8%, 12.5% and 10.2%, respectively, this year.
'The downgrade from April reflects worse than anticipated outcomes in the first half of this year, an expectation of more persistent social distancing into the second half of this year, and damage to supply potential,' IMF Chief Economist Gita Gopinath said in a blog on the IMF website.
'A high degree of uncertainty surrounds this forecast, with both upside and downside risks to the outlook,' she added.
Apart from pandemic-related downside risks, escalating tensions between the United States and China on multiple fronts, frayed relationships among the Organization of the Petroleum Exporting Countries (OPEC)+ coalition of oil producers, and widespread social unrest pose additional challenges to the global economy, the report warned.
On the positive side, the Ifo business climate index for Germany rose to a reading of 86.2 in June from 79.5 in May, beating forecasts.
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