(Bloomberg) -- European shares tumbled the most in two weeks as investors fretted over the prospect of a fresh round of U.S. tariffs on European and U.K. exports and the resurgence of coronavirus cases.
The Stoxx 600 Index was down 2.8% at the close, with carmakers and travel stocks leading losses. Stocks such as Diageo Plc and luxury goods makers also dropped on the possibility of the U.S. imposing tariffs on $3.1 billion of exports from France, Germany, Spain and the U.K.
Against a backdrop of new cases of the coronavirus surfacing in the U.S. and Germany, equities were also weighed down by comments from European Central Bank Chief Economist Philip Lane who said that its Pandemic Emergency Purchase Program isn't open-ended. Lane also warned against reading too much into early signs of a euro-area rebound.
European equities have retreated from a recent high and are on track to end June with a more muted gain of 1.9% as investors weigh up the easing of lockdown restrictions across Europe against the risk of a second wave of infections.
“In terms of easing of restrictions, we're a little bit wait and see,” David Moss, a fund manager at BMO Global Asset Management, said by phone. “I think that most people would probably accept that, as always, the market has priced in some of the reopening, or the reopening to some extent, before it's actually happened.”
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