Europe midday: Covid-19 worries, lower German GDP forecasts drag on stocks
European stocks got off to a poor start in the second quarter, weighed down by a warning over rising Covid-19 cases in the States from a top official and a sharp downgrade to Germany's GDP outlook from a top forecaster.
Compounding traders' woes, a technical glitch on the German Stock Exchange threw a spanner into early trading in the country and in several others across Central and Eastern Europe.
Against that backdrop, as of 1235 BST, the benchmark Stoxx 600 was trading 0.97% lower to 356.83, alongside a 1.66% drop for the German Dax to 12,107.23 while the FTSE Mibtel was down 1.81% at 19,024.52.
Overnight, Anthony Fauci, the US government's top epidemiologist, warned that the daily rate of new coronavirus infections in the States could soon hit 100,000.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, concurred with that assessment.
However, he was increasingly hopeful that might not come to pass, pointing to a slowdown in the rate of new infections last week to 27.2% - the least since 19 June.
That, he said: "suggests that changes in people's behavior in the worst-hit states, even before restrictions on bars and restaurants were reimposed, are starting to suppress the spread of the virus."
Meanwhile, on the economic front, Germany's IFO institute cut its forecast for German GDP growth in 2021 from 10.0% to 6.4%, even after a projected 6.7% slump in 2020.
Somewhat ironically, the fresh forecasts came as the Federal Labor Office reported a lower-than-expected rise in unemployment to 6.4% for June after 6.3% in May.
Claims also undershot forecasts for an increase of 120,000, rising by just 69,000 after a 237,000 increase in May.
Nevertheless, the number of unemployed was now just below 3.0m, a threshhold that had not been surpassed since 2011.