Europe close: Stocks dip amid recession worries

European markets finished in the red on Wednesday on the back of recessionary fears but well off their worst levels of the session.

Michael Hewson, chief market analyst at CMC Markets UK, said: "After two days of gains markets in Europe have slipped back, weighed down by uncertainty as to where the next political or economic catalyst for a move is likely to come from. Against such an uncertain outlook for trade, geopolitics and concerns about an economic slowdown it is clear that investors are becoming much more risk averse.

"What is clear is that money has continued to flow into safe havens, with Italian 10 year yields hitting record lows, on hopes that Italian politicians will be able to bring about some short term political stability in the form of a new coalition government, between 5 Star and the Democratic party."

The pan-European Stoxx 600 index was down 0.20% at 372.86, while the German DAX dippd 0.25% to 11,701.02 and the French CAC 40 by 0.34% to 5,368.80.

Meanwhile, London's FTSE 100 was 0.35% higher at 7,114.71, while Italy's FTMIB was flat at 20,990.71 as the country appeared to be closing in on the formation of a new coalition government.

On the currency front, the pound was 0.61% lower against the US dollar to 1.2254 and the euro by 0.49% to 1.1028 after the news that Boris Johnson will attempt to shut parliament from mid-September in a bid to stop MPs from blocking a no-deal Brexit.

In corporate news, tech stocks led the way lower, with German duo Infineon Technologies AG and Wirecard AG both falling by more than 1% as anxious investors fretted over global downside risks.

European tobacco firms such as Imperial Brands and British American Tobacco were also feeling the heat following the news that industry giants Altria Inc. and Philip Morris International are considering a merger.

Travel operator Thomas Cook saw its shares plunge 17% after it admitted that shareholders interests will be "significantly diluted" and the company could even cancel its listing courtesy of a a rescue deal that has been agreed with Chinese investor Fosun.

Finally, BP among the top gainers on the FTSE 100, climbing 1.85% to 497.10p, after it emerged the multinational oil giant will sell its entire Alaska business to private oil and gas firm Hilcorp Energy for $5.6bn (£4.6bn), ending six decades of operating in the US state.