European stocks slid as markets opened on Thursday, with new coronavirus cases in several US states and Beijing alarming investors.
Fears grew of a second wave, ending a two-day market rally fuelled by optimism about recovery from economic lockdowns and coronavirus treatment trials.
California and Texas have both reported new highs in daily infection rates, while Florida, Oklahoma and other states also report a resurgence in cases.
Meanwhile authorities in China took drastic measures to contain an outbreak in capital Beijing, including cancelling flights, shutting schools and quarantining neighbourhoods, according to Reuters.
The news pared gains in the US on Tuesday and Asian stock markets overnight, and sent European stocks into the red in early trading on Wednesday.
Britain’s FTSE 100 (^FTSE), which had seen its strongest two days in a fortnight earlier this week, was trading 0.5% lower at around 8.30am in London. Germany’s DAX (^GDAXI) was down 0.1%, and France’s CAC 40 (^FCHI) was down 0.3%.
Oil prices also slipped on Thursday as hopes of recovery in demand faltered.
Investors also waited for news on the Bank of England’s latest policy decisions on the coronavirus. Policymakers are expected to launch a fresh round of quantitative easing (QE) to backstop the markets and government borrowing, creating money to increase its bond-buying programme by at least £100bn ($125bn).
"The market continues to balance re-opening optimism with unknowns around the economic uncertainties from a secondary outbreak of the virus," said Stephen Innes, market strategist at AxiTrader, Reuters reports.
"It is a big shock to markets that China, which appears to have successfully quashed the disease, is seeing a second wave. And in the US we see record cases in many states," said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.