Europe midday: Shares extend losses on weak Asia, Fed tapering worries

The pan-European Stoxx 600 index was down 1.53%. France's CAC 40 was 2.02% lower and Britain's FTSE 100 1.69%.

"While stocks have been on a tear, hitting all-time highs last month, the mood in the markets is starting to sour. Concerns over the health of the economic recovery are denting risk sentiment and hitting demand for stocks even as the Federal Reserve moves towards tapering asset purchases," said OANDA analyst Sophie Griffiths.

"Inflation concerns and fears that the Federal Reserve could move to start tightening monetary policy have been lingering over the past few weeks, particularly since its hawkish shift at the June meeting. "

The minutes from the Fed's June policy meeting confirmed that the central bank is moving towards tapering its asset purchases, potentially as soon as this year. However, the minutes also revealed that more evidence of a robust economic recovery would be needed to set a more defined timeline for tapering.

"The overriding concern being reflected in the bond market is that peak growth has been reached, and the benefits from fiscal policy are starting to fade. Recent data has been disappointing."

"Banks in Europe are taking the biggest hit on the back of falling government bond yields. Other cyclical stocks such as automotive and miners are also firmly out of favour on global growth concerns."

Investors were also eyeing US jobless claims data due later on Thursday today. Forecasts were for a fall to 350,000, down from 364,000 the previous week.

"This would be a new post-pandemic low and support the view that the US labour market is continuing along a steady but not too strong path to recovery," Griffiths said.

Asia-Pacific shares fell as Chinese tech stocks in Hong Kong came under pressure after regulatory fears resurfaced.

Beijing recently announced a stepping up in oversight on Chinese listings in the US after a recent crackdown on ride-hailing giant Didi and other tech firms.

In equity news, remote connectivity software specialist Teamviewer slumped more than 13% after the company reported weaker-than-expected billings growth in the second quarter.

B&M Value Retail shares fell despite the company reporting a strong start to the year as it reported first-quarter UK like-for-like sales up by more than a fifth compared with pre-pandemic levels.

German automotive lighting group Hella slipped 1.5% after brakes maker Knorr-Bremse dropped plans to acquire a 60% stake in the company. Knorr-Bremse shares jumped 6% to top the index.

In the UK, Deliveroo rose after it posted 88% jump in orders during the June quarter.

Also on the upside, Ladbrokes owner Entain gained after it increased its guidance for full-year earnings following a strong performance from the gambling group in the first half.