London - European stock markets fell on Wednesday, with losses accelerating after the United States reported that the world's biggest economy recorded its biggest contraction in five years.
Investors also cashed out in a bid to reduce their risk amid the unrest in Iraq, sending London's benchmark FTSE 100 index down 1.00% to 6 718.45 points around in afternoon trade.
Frankfurt's DAX 30 lost 0.98% to 9 840.38 points and the CAC 40 in Paris dropped 1.53% to 4 449.06 compared to Tuesday's closing levels.
Risk appetite
Madrid's IBEX 35 index fell 1.92% to 10 892.60 points and Milan's MIB slumped 1.04% to 21 407.56.
The euro stood at $1.3634, up from $1.3634 late in New York on Tuesday.
"European equities are suffering from a mild correction to risk appetite ... after geopolitical tensions in the Middle East temper the desire to own risk," said Spreadex trader David White.
Iraq's premier rejected forming a unity government to confront jihadists whose sweeping offensive in the country was bolstered when Al-Qaeda's Syrian franchise on Wednesday pledged loyalty to them at a border town.
Part takeover
Wall Street opened in the red, with the Dow Jones slipping 0.07% and Nasdaq losing 0.19%.
In Paris trading meanwhile, energy group GDF Suez was in focus after the French government announced that it had sold 3.1% of the group, leaving it with holding 33.6% and raising about €1.5bn.
The state is expected to use the money to buy 20% of power-to-energy group Alstom, under a part takeover of Alstom by US group GE.
Lead from losses
On the London Bullion Market, the price of gold declined to $1 312.00 an ounce from $1 318.50 on Tuesday.
Asian stock markets had slipped on Wednesday following the previous day's gains, while investors took their lead from losses on Wall Street on Tuesday.