European shares fall to new 1-1/2 month lows as global economy darkens
EDINBURGH Oct 8 (Reuters) - European stocks fell on Wednesday, hitting fresh 1-1/2 month lows as investors ditched shares globally in the face of a spate of discouraging developments concerning the global economy.
The pan-European FTSEurofirst 300 index of blue-chip shares was down 0.6 percent at 1,321.28 by 0712 GMT, marking its lowest level since mid-August.
Asian and U.S. shares fell overnight after the IMF cut global growth forecasts and German industrial production missed expectations.
"The IMF laid it on pretty thick yesterday... and topped it off with the cherry that global growth may never reach its pre-crisis levels ever again," Jonathan Sudaria, trader at London Capital Group, said in a note.
"In the short term at least, it appears that traders have also come to the same conclusion as there is no apparent let up in the selling pressure this morning."
In the latest evidence of economic malaise, growth in China's services sector weakened slightly in September as new business cooled, a private survey showed on Wednesday, reinforcing signs of a slowdown in the world's second-largest economy that could prompt more stimulus measures.
Cyclical stocks, sensitive to economic optimism, bore the brunt of the selling. The top sectoral faller was travel and leisure, down 1.6 percent.
Airlines led the sector lower, having come under pressure from the spread of the Ebola virus to Europe, with Air France-KLM down 5.2 percent after it said a pilot strike had wiped more than a fifth off its estimated full-year core profit. (Reporting by Alistair Smout; Editing by Sudip Kar-Gupta)
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