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European stocks slide amid fears of new coronavirus wave

A surge in the number of coronavirus infections around the world has pushed European stocks down from a two-week high as investors turned cautious amid fears of a new wave of COVID-19.

The pan-European STOXX 600 declined 1.5, with travel & leisure, automakers and banks being among the hardest hit sectors.

The decline comes as European Union nations are prepared to block American travelers from entering as many US states reported record daily increases in coronavirus cases amid relaxing of lockdowns in a move that raised worries of further restrictions.

“While the economic impact of such measures will be less than shutting down an entire economy, a recovery of this nature is a messier story for investors to digest and this could act as a drag on equities,” AJ Bell investment director Russ Mould wrote in a morning note.

Meanwhile, stocks in Asia Pacific mostly edged higher on Wednesday.

“It is still unclear when the spread of COVID-19 will subside on a global basis, as the spread is continuing in emerging economies in particular. It seems inevitable that the negative impact on the global economy, including Japan, will become prolonged without effective vaccines and medicines,” the Bank of Japan said.

“Due to expectations for the future, prices in financial markets have been high compared with the current severe situation of the real economy. It is necessary to closely monitor future developments in the markets to see whether there will be a correction in asset prices,” it added.