European stocks ended notably lower on Wednesday amid worries the rapid spread of the Delta variant of coronavirus could significantly slow down the pace of global economic recovery.
Investors also stayed cautious, looking ahead to the European Central Bank's take on stimulus.
Governing Council member and Austria's central bank chief Robert Holzmann told Eurofi Magazine that the ECB may normalize policy "sooner than most financial market experts expect."
The pan European Stoxx 600 slid 1.06%. The German DAX dropped 1.47%, while France's CAC 40 index and the U.K.'s FTSE 100 lost 0.85% and 0.75%, respectively. Switzerland's SMI shed 1.05%.
Among other markets in Europe, Austria, Belgium, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Turkey ended with sharp to moderate losses.
Russia edged up marginally, while Czech Republic closed flat.
In the UK market, Persimmon lost more than 4%. Taylor Wimpey, Land Securities, Barratt Developments, Melrose Industries, Royal Mail, Informa and Smith (DS) Plc lost 2 to 4%.
Lloyds Banking Group, Hikma Pharmaceuticals, AstraZeneca, 3I Group, Barclays, Natwest Group and Anglo American Plc also ended sharply lower.
B&M European Value Retail climbed nearly 7% after the company said that group revenue to date has been broadly in line with market expectations.
Smiths Group gained about 2.6%. The industrial technology company announced that it has agreed the sale of medical devices supplier Smiths Medical to ICU Medical, Inc. (ICUI) on terms that are superior to the previously announced transaction entered into with TA Associates.
National Grid gained 1.9%. Severn Trent, Rentokil Initial and Unilever also ended notably higher.
Airlines including EasyJet Plc and Ryanair Holdings rallied sharply after reports that the U.K.'s "traffic light" travel system could be scrapped from next month.
In the French market, Technip tumbled 3.7%. Sanofi shares ended 2.5% down after the company said it has entered into a definitive merger agreement to buy Kadmon Holdings, Inc. (KDMN), the developer of Rezurock, a recently FDA-approved treatment for chronic graft-versus-host disease.
Schneider Electric, Societe Generale, Atos, Unibail Rodamco, Valeo, STMicroElectronics, BNP Paribas, Legrand, Credit Agricole, Faurecia, Michelin and Publicis Groupe lost 1 to 2.3%.
In Germany, Daimler, Siemens, BMW, Deutsche Post, Infineon Technologies, Vonovia, Bayers, HeidelbergCement, Thyssenkrupp, Munich RE, SAP, Volkswagen and Fresenius Medical Care lost 1 to 2.3%.
Shares of Swiss recruitment company Adecco Group declined. The company had announced on Tuesday that it has acquired QAPA.
Spanish turbine maker Siemens Gamesa plunged sharply after JPMorgan downgraded the stock's rating to "neutral". Danish peer Vestas also declined sharply.
In economic releases, France's trade deficit increased to EUR 6.96 billion from EUR 6.05 billion in June on falling exports, data published by customs office revealed. In the same period last year, the shortfall totaled EUR 6.79 billion.
France's current account deficit widened in July driven by a sharp rise in the visible trade gap, the Bank of France said. The current account deficit increased to EUR 3.5 billion from EUR 0.9 billion in June.
The deterioration was mainly due to the degradation of the deficit of goods excluding energy by EUR 2.9 billion, while the deficit in energy goods remained stable at EUR 2.9 billion.
French payroll employment increased sharply in the second quarter, the statistical office Insee said in its report. Payroll employment increased sharply by 289,400 in the second quarter after rising 148,500 in the first quarter.
At the end of June 2021, payroll employment was 0.6% above its end of 2019 level.
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