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European stocks stumbled on Wednesday amid growing investor unease over the extent of economic damage to come from the coronavirus pandemic, and as a difficult earnings season was getting under way.
Extending opening losses, the Stoxx Europe 600 index SXXP, -1.61% fell 1.3% to 329.36, setting it up to break a five-session win streak. The German DAX 30 DAX, -1.90% and French CAC 40 PX1, -1.70% each fell around 1.7%, while the FTSE 100 index UKX, -1.96% dropped 1.5%.
Recent gains in Europe and the U.S. have been driven by optimism that Western governments are getting a handle on the deadly pandemic. But overshadowing that was a warning from the International Monetary Fund on Tuesday that this year would see worst global growth year since the Great Depression.
U.S. stocks were also set for a weaker start, with Dow industrial futures YM00, -1.68% last down 346 points, or 1.4%, to 23,545.
Earnings season was getting under way, with initial glimpses of enormous challenges companies are facing against the backdrop of the pandemic. JPMorgan Chase JPM, -2.74% said on Tuesday it had set aside $8.3 billion in provisions for loan losses, given the likelihood of a severe recession. Bank of America BAC, -0.79%, Citigroup C, -2.69% and Goldman Sachs GS, -0.53% will all report on Wednesday.
In Europe, shares of Adidas ADS, -2.81% fell nearly 3% after the German sportswear maker said it would receive a €3.0 billion ($3.2 billion) government-backed loan and suspend dividend payments. The company spoke of a “severe impact on its revenue and cash generation in most other parts of the world since mid-March,” in addition to difficulties in its China markets since end-January.
Energy companies were leading on the downside, as Brent BRNM20, -3.54% and U.S. crude oil CL.1, -2.43% prices fell by 3.5% and 2.5%, respectively. The International Energy Agency on Wednesday predicted a record fall in oil demand in April and rapidly filling crude storage as coronavirus shutdowns have crushed demand for the commodity.
Shares of Total FP, -5.00% TOT, -2.29%, Royal Dutch Shell Group RDS.A, -0.96% RDS.B, -0.90% and BP BP, -1.88% BP, -5.52% fell around 4% each.
