(Reuters) - European stocks were hit by a wave of selling in global equity markets on Thursday after the U.S. Federal Reserve signalled a long and difficult path of recovery for the world’s largest economy.
The pan-European STOXX 600 index fell 1%, led by miners due to weaker metal prices. Other economically sensitive sectors such as banks and automakers and oil and gas dropped between 1.2% and 2%.
The Fed minutes showed that policymakers were doubtful of a quick economic rebound and suggested stimulus measures for a longer period, pushing the Wall Street indexes off their all-time highs on Wednesday.
“The change in mood has been clearly down to the release of the minutes which reminded investors that the economy is still not in good shape,” said Hussein Sayed, chief market strategist at FXTM.
The minutes also disappointed some investors who were expecting the Fed to discuss capping government bond yields as part of a broader policy review.
“That the Fed appeared reluctant to step up further stimulus efforts imminently, disappointed the bulls who were expecting further clues on the trajectory of monetary policy.”
A full bounceback from the euro zone’s deepest recession on record will take two years or more, a Reuters poll showed, with economists saying there is a high risk of the job recovery reversing by the end of 2020.
Worries over rising coronavirus cases in Europe also kept investors on edge. Norway said it will impose a 10-day quarantine on all people arriving from Britain, Austria, Greece and Ireland from Aug. 22.
Among individual stocks, Chilean miner Antofagasta fell 3.8% after it posted a 22.4% plunge in first-half core earnings on lower copper sales, but said it would pay an interim dividend.
Swedish private equity firm EQT slumped 10.6% as it said the pandemic led to fewer investments for the company this year and sharply slower pace of exits.
Intercontinental Hotels Group rose 0.4% and France’s Accor gained 2.5% after a French newspaper reported the hotel operators examined a merger.
German real estate firm Tag Immobilien jumped 4.1% as it confirmed its guidance for 2020 and said raising it during the year was a possibility.
Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur