Europe midday: Losses accelerate as investors fret over epidemic's path

The night before, US Federal Reserve chief, Jerome Powell, had called the current downturn the most severe "in our lifetime" adding that the path forward for the US economy was "extraordinarily uncertain" due to the difficulty in predicting the path of the novel coronavirus.

Echoing that sentiment, IG chief market analyst Chris Beauchamp told clients: "A double-digit percentage decline in the German economy and abysmal results from Lloyds have put the cat among the pigeons this morning.

"[...] Continuing indications of a rise in virus cases throughout Europe have added to the caution, with markets worrying that Q2 was not the last quarter of significant economic weakness."

On a more positive note, Astra Zeneca executives said "so far so good" regarding incoming data for the Covid-19 vaccine that it was developing with Oxford University.

As of 1209 BST, the German Dax was down by 2.85% to 12,457.26, alongside a 2.92% fall on the Italian FTSE Mibtel to 19,301.31.

Tellingly, euro/dollar was down as well, retreating 0.31% to 1.1755.

The pan-European Stoxx 600 meanwhile was down 1.6% at 361.34.

Cyclical areas of the stock market were particularly weak, with the Stoxx 600 sector gauge for Automobiles&Parts down 4.11% to 392.87 and another for lenders' shares off by 3.83%.

Pacing losses among the latter was stock in BBVA and Lloyds.

Airbus shares were in focus after the manufacturer posted a larger than expected second quarter loss, offset by an outlook for reduced cash outflows in the back half of 2020 that sent the shares up by 3%.

Wind-turbine maker Siemens Gamesa was the top gainer on the Stoxx 600, even as it posted nine-month losses of €805m.

German GDP data underlined the severity of the downturn in the single currency bloc, although the latest unemployment figures out of the same country offered perhaps a glimmer of hope.

GDP slumped by 10% over the three months to June, marking the biggest (annualised) quarterly decline in at least half a century and was down by an annualised 11.7%, according to the Federal Office of Statistics.

That compared to a 4.7% quarterly drop in the first quarter of 2009, during the last financial crisis, and a 7.9% annualised fall in the second quarter of 2009.

Unemployment however only rose by 69,000 last month (consensus: 120,000) to reach 2.943m, Germany's Labour Office said, pushing the unemployment rate from 6.3% to 6.4%.

Further south, ISTAT announced a 149,000 person jump in the number of unemployed to reach 2.204m.