Europe open: Travel and leisure stocks pace losses amid risks of second Covid-19 wave

Stocks on the Continent remain under pressure due to the threat that rising Covid-19 infections in multiple US states might slow the reopening of their economies.

At least six US states had hit record single-day rates of infections during the week it was reported on Wednesday, including some of the most populated, such as California and Texas, two of the main drivers of the American economy.

Investors were also keeping tabs on talks between the US and the European Union regarding whether to reopen travel links, amid reports that Americans, Brazilians and Russians would be excluded from any reopening plans.

"Statistics like these prompted dealers to dump stocks as there were fears this could be the beginning of a second wave of cases," said David Madden at CMC Markets UK.

Against that backdrop, as of 0849 BST, the benchmark Stoxx 600 was down 0.7% at 354.56, alongside a 0.43% dip for the German Dax to 12,049.61, while the Cac-40 was off by 0.90% to 4,827.32 and the FTSE Mibtel was retreating 0.98% to 18,972.53.

In parallel, front month Brent crude oil was down 1.84% to $39.55 a barrel while euro/dollar was to be found at 1.1235, off by 0.14%.

Travel&leisure stocks were the weakest segment in equity markets, with the Stoxx 600 sector gauge falling by 1.64%.

That was despite a big bounce in Lufthansa stock after billionaire shareholder, Heinz Hermann Thiele, told the Frankfurter Allgemeine Zeitung that he would support the government's rescue plans for the airline.

On the economic front, consultancy GfK's consumer confidence gauge jumped from a reading of -18.6 for June to -9.6 in July easily surpassing the -12.0 print expected by economists.

Yet the steady rebound predated the recent reimposition of a lockdown in North-Rhine Westphalia, which might be expected to act as a drag going forward, said Pantheon Macroeconomics's Claus Vistesen.

For later in the session, the meetings of the European Central Bank's 3-4 June policy meeting were due out at 12:30 BST.

Among other matters, investors are keen to see whether, in a concession to Germany's constitutional court, it provides further details on the judgements around the 'proportionality' underlying its decisions.

Nonetheless, precisely for that reason, on Wednesday, the ECB had already provided Germany's national monetary authority, the Bundesbank, with additional documents, Reuters reported.