The pan-European Stoxx 600 fell 1.3% by mid-morning, with autos dropping 1.8% to lead losses as all sectors and major bourses slid into the red.
European investors are also erring on the side of caution ahead of Thursday’s European Central Bank meeting. A recent spike in euro zone inflation and an uptick in economic indicators has led some market watchers to anticipate a more hawkish tone from policymakers.
The declines in Europe come after a choppy trading session in U.S. markets on Tuesday. The Dow Jones Industrial Average fell more than 200 points as investors reassessed the growth outlook following a smooth ride in the market this year making U.S. stock futures fractionally lower in early premarket trading on Wednesday.
The mixed moves stateside came as concerns over the potential economic hit of the delta variant weighed on investor sentiment, with Goldman Sachs downgrading its U.S. economic growth outlook over the weekend.
On Wednesday, the U.S. Labor Department will release its closely watched Job Openings and Labor Turnover Survey which will add to jobs data following last Friday’s U.S. nonfarm payrolls miss; nonfarm payroll growth in August increased by just 235,000 vs. expectations of 720,000.
Meanwhile, shares in Asia-Pacific were mixed in Wednesday trade, as data showed Japan’s economy saw 1.9% annualized growth, higher than the initial estimate for a 1.3% rise.
In terms of individual share price movement, Siemens Gamesa dropped more than 7% to the bottom of the Stoxx 600 after JPMorgan cut the stock to neutral on expectations that the company’s earnings downgrade will last longer. Parent company Siemens Energy also fell 5.8%.
At the top of the European blue chip index, Billington & Mayman European Value Retail shares climbed 4% after a promising trading update.