UPDATE 2-Travel and auto stocks lead Europe lower amid virus fears

  • Reuters
  • Stock Market News
UPDATE 2-Travel and auto stocks lead Europe lower amid virus fears
Credit: © Reuters.

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* Commerzbank, ABN Amro swing to Q1 loss, shares drop

* Italy's Exor drops as Covea ditches deal to buy PartnerRe

* STOXX 600 profits expected to decline 46.7% in Q2

(Adds details, updates prices)

By Sruthi Shankar

May 13 (Reuters) - Travel stocks, automakers and banks led a slide in European shares on Wednesday as fears of a resurgence in coronavirus cases and a worrying outlook from the U.S. central bank chief dented hopes of a swift economic recovery.

The pan-European STOXX index .STOXX fell 1.9% to hit a one-week low, with losses deepening after U.S. Federal Reserve Chair Jerome Powell warned of an "extended period" of weak growth and stagnant incomes due to the health crisis. hard-hit travel & leisure index .SXTP and auto stocks .SXAP fell 5% each, while banking shares .SX7P slid 3.7%.

A batch of weak earnings reports added to the gloom.

Shares in Germany's Commerzbank CBKG.DE fell 7.1% and Dutch bank ABN Amro ABNd.AS dropped 9.1% after swinging to a loss in the first quarter as the pandemic drove up loan loss provisions. Bank DBKGn.DE sank 6.4% on news that top managers will waive one month of fixed pay in an effort to cut costs. luxury carmaker Aston Martin AML.L plummeted 16% as it posted a deep first-quarter loss after sales dropped by nearly a third due to the impact of the coronavirus crisis. shares have reversed some of the strong recovery gains made in April, as South Korea, Germany and China reported a rise in infections after easing their restrictions and a top U.S. health expert warned against easing lockdowns too soon.

"The correction could continue for a few weeks," said Simona Gambarini, markets economist at Capital Economics. "There are worries about easing of lockdowns being premature in certain countries, a second wave of contagion, weak economic data and tensions between the U.S. and China."

A leading U.S. Republican senator on Tuesday proposed legislation that would authorize President Donald Trump to impose sanctions on China if it fails to give a full account of events leading to the outbreak of the coronavirus. producer AMS AMS.S slumped 8.7% after saying that it planned another capital increase to finance the takeover of Osram OSRn.DE . in Exor EXOR.MI , the holding firm of Italy's Agnelli family, fell 7.2% after French insurer Covea walked away from its planned $9 billion purchase of PartnerRe, the Bermuda-based reinsurer owned by Exor. expectations are deteriorating sharply in Europe, with companies listed on the STOXX 600 now expected to report a collective drop of 46.7% in earnings in the second quarter, down from a fall of 44.9% forecast the week before.

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