Europe Markets

European markets close lower as coronavirus spike weighs on sentiment; BT up 4%

Key Points
  • The pan-European Stoxx 600 closed down by 1%, with most sectors and major bourses slipping into negative territory.
  • WHO Director-General Tedros Adhanom Ghebreyesus warned that "too many countries are headed in the wrong direction."
  • U.K. GDP expanded by 1.8% in May following April's historic 20.4% contraction. Economists had expected a 5.5% rebound.

European stocks closed lower on Tuesday as a spike in coronavirus cases started to weigh on global market sentiment.

The pan-European Stoxx 600 closed down by 1% provisionally, with tech stocks shedding almost 2.8% to lead losses as most sectors and major bourses slipped into negative territory.

Virus cases have spiked in a number of countries around the world. On Monday, World Health Organization Director-General Tedros Adhanom Ghebreyesus warned that "too many countries are headed in the wrong direction."

"In several countries across the world, we are now seeing dangerous increases in Covid-19 cases, and hospital wards filling up again," Tedros said. "It would appear that many countries are losing gains made as proven measures to reduce risk are not implemented or followed."

On Wall Street, equities were mostly higher. The Dow Jones Industrial Average climbed around 300 points, while the Nasdaq and S&P 500 indexes also traded in the black.

U.S. earnings are a key focus for investors, with some of the largest banks in the U.S. such as Citigroup and JPMorgan Chase reporting better-than-expected results Tuesday.

In Europe Tuesday, official figures revealed that U.K. GDP (gross domestic product) expanded by 1.8% in May following April's historic 20.4% contraction. Economists polled by Reuters had expected a monthly rebound of 5.5%.

In terms of individual share price action, British homebuilder Meggitt and German software company Nemetschek both fell by more than 6%.

BT stock meanwhile was one of the top performers, climbing 4% after the U.K. announced plans to strip out Huawei from its 5G networks. The firm's shares likely got a boost from the government's commitment to a seven-year transition period for removing Huawei equipment, a move major telecom operators had been lobbying for.

- CNBC's Maggie Fitzgerald and Eustance Huang contributed reporting to this story.