European equity markets have been suffering the toughest week since June.

As financial markets foresee economic fallout from fresh restrictions on Covid-19, Wall Street is already slipping.

Stock markets had their worst week in Europe since June, after investors shrugged off the eurozone’s record-breaking growth and centered on the future consequences of new lock-out restrictions.

The news of a nearly 14 percent quarterly GDP jump in the single currency region did nothing to lift the mood in the midst of growing fears that a second Covid-19 wave would put an end to the West ‘s recovery and even threaten a double-dip contraction.

The Europe-wide Stoxx 600 lost 5.6 percent this week, as the lockdowns triggered a selling wave in Germany and France. When trade began on Monday, the Dax index in Frankfurt was down 8.6 percent, while the CAC in Paris dropped 6.4 percent of its value in a week of frenetic trading reminiscent of the panic-selling in early March.

Analysts said figures show that one of the four main eurozone countries-Germany, France, Italy and Spain-were now regarded as ‘past’ with better than predicted outcomes in the third quarter of 2020.

Data from the EU statistics agency Eurostat showed that, in the 19-nation common currency region, GDP increased by 12.7% between July and September, way above the 9.4% growth expected by the financial markets.

France, followed by Spain at 16.7%, Italy at 16.1% and Germany at 8.2%, posted the largest quarterly growth among the ‘big four’ of the eurozone at 18.2%.

The growth in eurozone GDP accompanied an 11.8 percent contraction in the second quarter and a 3.7 percent contraction in the first three months of the year, and the economy was still 4.3 percent smaller since the July-September turnaround than a year ago, when a new period of stronger anti-pandemic restrictions was achieved.

Wall Street was on pace for the worst week since the early days of the Covid-19 crisis in March, with concern about record levels of new infections compounded by disappointing data from some of the biggest tech firms in the US.

Up to the general election next week, the S&P 500 was down by more than 1 percent in early trading in New York and on course to having dropped 6 percent of its value in a week. The industrial average of the Dow Jones was down 1 percent on the day, on course to lose 2,000 points for the week, or 7 percent.

The UK’s biggest capital market tracker, the FTSE 100, saw a quiet conclusion to a gloomy week. A four-point decline showed that the index was almost steady on the day at 5577, but its 283-point loss over the course of the week was its worst performance since June. The FTSE is already 26 percent down on the year.

With US light crude and Brent crude, both main market indices, heading for weekly falls of more than 10 percent, falling oil prices reflected concerns that slower operation would lead to weaker gasoline demand.

Barret Kupelian, a senior PwC economist, said: “The bad news is that infections are now growing in Europe.” Authorities have responded in a mix of ways to minimize contact, which is likely to slow down economic growth in the fourth quarter.

The European Central Bank announced this week that, in December, it would offer fresh assistance to the eurozone economy as forecasts for growth, unemployment and inflation became more pessimistic.

Eurostat said unemployment in the euro area increased by 75,000 to 13.6 million in September, up from 1.3 million last year, while inflation remained constant at an annual rate of -0.3%.

A Berenberg analyst, Florian Hense, said: “The third quarter is past.” Countries across Europe are strengthening controls in order to contain the second Covid-19 surge. Economic development is projected to decrease in the fourth quarter in the euro region.

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