European Markets Close Notably Lower On Growth Worries

European markets ended lower on Tuesday as World Bank's warning that the global economy this year will see the deepest recession since the World Wart II rendered the mood cautious and prompted investors to sell stocks.

Slightly fading hopes of a quicker global economic recovery following a jump in the number of new coronavirus cases across the globe and WHO's warning that the pandmic was "far from over" prompted investors to take some profits.

Data showing a sharp contraction in Euro Zone Gross Domestic Product and a marked decline in German exports too contributed to the weakness in the markets. A lack of progress in trade talks between the UK and EU also hurt sentiment.

The pan European Stoxx 600 declined 1.22%. The U.K.'s FTSE 100 shed 2.11%, Germany's DAX and France's CAC 40 lost 1.57% and 1.55%, respectively. Switzerland's SMI ended 0.32% up.

Among other markets in Europe, Austria, Belgium, Czech Republic, Finland, Greece, Ireland, Netherlands, Norway, Portugal, Spain and Sweden closed with sharp to moderate gains.

Poland and Turkey ended modestly lower, while Russia and Denmark closed flat.

In the U.K. market, Meggitt and Rolls-Royce Holdings tumbled 8.1% and 7%, respectively. Royal Bank declined nearly 6.5%. Land Securities, IAG, Barratt Developments, Royal Dutch Shell, Informa, Berkeley Group, 3i Group, Flutter Entertainment, Barclays, Lloyds Banking Group and Standard Chartered lost 4 to 6%.

On the other hand, Aveva Group, Fresnillo, Ocado Group, BAE Systems, Hiscox and Reckit Benckiser gained 1 to 4.5%.

In the German market, Thyssenkrupp, Deutsche Bank, Covestro, HeidelbergCement and RWE lost 3.4 to 5%. Daimler, Henkel, Wirecard, Allianz, BASF, Adidas, BMW and Volkswagen declined 2 to 3%. Beiersdorf bucked the trend and moved up by about 1%.

In France, Airbus Group, Technip and Societe Generale lost more than 7%. Credit Agricole declined 6.3%, while Bouygues, Safran, Peugeot, Orange, Saint Gobain, BNP Paribas, Publicis Groupe, Renault and Sodexo lost 2.7 to 5%.

In economic news, the euro area economy contracted at the fastest pace since 1995 as member countries initiated coronavirus containment measures in March, the revised estimate published by Eurostat showed. Gross domestic product declined 3.6% sequentially in the first quarter, but slower than the initial estimate of -3.8%. The fall reversed a 0.1% growth logged in the fourth quarter of 2019.

On a yearly basis, GDP shrank 3.1%, reversing previous quarter's 1% expansion. The first quarter rate was revised from -3.3% and was the largest fall since the third quarter of 2009.

Data from Destatis showed Germany's exports declined 31.1% year-on-year in April following a 7.7% drop in March. This was the biggest fall since the introduction of foreign trade statistics in 1950.

At the same time, imports decreased 21.6% annually after falling 4.4% a month ago. The last time imports went down that much was in July 2009 during the global financial crisis. Consequently, the trade surplus declined to EUR 3.5 billion, the lowest since December 2000, from EUR 17.8 billion in the same period last year.

On a monthly basis, the decline in exports deepened to 24%. Economists had forecast a monthly fall of 15.6%.

In news from France, the French government announced a €15 billion plane to recover its aerospace industry from the coronavirus crisis.

According to a report from the French Customs office, the country's trade deficit widened to EUR 5.02 billion in April from EUR 3.22 billion in March. This was the biggest shortfall since January. In the same period last year, the deficit totaled EUR 5.3 billion. Data showed that exports plunged 32.4% on a monthly basis, and imports declined 25%. Year-on-year, exports and imports were down 21.2% and 20.5%, respectively.

U.K. retail sales declined in May but at a slower pace as restrictions to contain the spread of coronavirus eased, data from the British Retail Consortium, or BRC, showed Tuesday. Total retail sales decreased 5.9% year-on-year in May, slower than the 19.1% fall in April.