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Europe Markets: European stocks pause after five-day winning streak

European stocks were set to break a five-session winning streak on Wednesday, as investor unease grew over the extent of economic damage to come from the coronavirus pandemic, and a difficult earnings season was about to get under way. Read More...

European stocks stumbled on Wednesday amid growing investor unease over the extent of economic damage to come from the coronavirus pandemic, and as a difficult earnings season was getting under way.

Extending opening losses, the Stoxx Europe 600 index SXXP, -1.66% fell 1.3% to 329.36, setting it up to break a five-session win streak. The German DAX 30 DAX, -1.91% and French CAC 40 PX1, -1.76% each fell around 1.7%, while the FTSE 100 index UKX, -1.98% dropped 1.5%.

Recent gains in Europe and the U.S. have been driven by optimism that Western governments are getting a handle on the deadly pandemic. But overshadowing that was a warning from the International Monetary Fund on Tuesday that this year would see worst global growth year since the Great Depression.

U.S. stocks were also set for a weaker start, with Dow industrial futures YM00, -1.75% last down 346 points, or 1.4%, to 23,545.

Earnings season was getting under way, with initial glimpses of enormous challenges companies are facing against the backdrop of the pandemic. JPMorgan Chase JPM, -2.74% said on Tuesday it had set aside $8.3 billion in provisions for loan losses, given the likelihood of a severe recession. Bank of America BAC, -0.79%, Citigroup C, -2.69% and Goldman Sachs GS, -0.53% will all report on Wednesday.

In Europe, shares of Adidas ADS, -3.25% fell nearly 3% after the German sportswear maker said it would receive a €3.0 billion ($3.2 billion) government-backed loan and suspend dividend payments. The company spoke of a “severe impact on its revenue and cash generation in most other parts of the world since mid-March,” in addition to difficulties in its China markets since end-January.

Energy companies were leading on the downside, as Brent BRNM20, -3.14% and U.S. crude oil CL.1, -1.98% prices fell by 3.5% and 2.5%, respectively. The International Energy Agency on Wednesday predicted a record fall in oil demand in April and rapidly filling crude storage as coronavirus shutdowns have crushed demand for the commodity.

Shares of Total FP, -4.62% TOT, -2.29%, Royal Dutch Shell Group RDS.A, -0.96% RDS.B, -0.90% and BP BP, -1.88% BP, -5.10% fell around 4% each.

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