European stock markets turned flat Thursday, after dizzying losses the previous day, as investors digested new coronavirus lockdowns in France and Germany, awaited a eurozone interest rate call and absorbed a barrage of corporate results.
In early afternoon deals, London and Paris stocks flatlined, but Frankfurt edged higher, following losses across most of Asia and Wednesday on Wall Street.
The euro sagged before the European Central Bank's latest monetary policy decision at 14:45.
World oil prices extended this week's meltdown to plumb four-month lows on virus-driven demand fears.
European equities were hammered Wednesday after the German and French governments launched tighter restrictions to curb soaring Covid-19 infection rates.
The moves followed weeks of exponentially rising new infections across Europe that forced governments across the continent to put fresh containment measures in place.
Double-dip recession risks
The deadly second wave could potentially spark another painful global recession, as businesses and economies buckle once more under the restrictions, analysts warn.
"Risks of a double-dip recession are rising for the global economy," warned Agathe Demarais, global forecasting director at The Economist Intelligence Unit.
"A second wave of the coronavirus pandemic is raging across Europe, prompting several countries, including heavyweights France and Germany, to re-impose stringent measures to contain the outbreak," she told AFP.
In tumultuous Wednesday trade, Frankfurt stocks dived more than four percent, while London and Paris each slumped by around three percent.
"Looking ahead, the prospects for the global economy have darkened for the rest of the year," Demarais added.
"Many major economies will likely see their GDP contract on a quarterly basis in October-December. In turn, the recovery ... will take even longer than planned."
Corporate earnings
In London on Thursday, investors shrugged off news that British bank Lloyds and oil giant Royal Dutch Shell both rebounded into profit in the third quarter.
Paris digested news that European aircraft maker Airbus flew into the losses on exceptional charges linked to the deep job cuts, as virus fallout ravaged the aviation sector.
Frankfurt was partly helped by news that German auto giant steered back into profit in the same period, after negotiating pandemic fallout.
Despite Thursday's flat performance in Europe, downside risks remain, observers say.
"Downside risks have been evident for weeks, if not months, and we're starting to see some of these materialise," OANDA analyst Craig Erlam told AFP.
"Covid-19 is obviously at the centre of much of this and the rapid increase we're now seeing - particularly across Europe - and the severity of the restrictions is a brutal reminder of the dark days of March and April and we're not close to the peak yet."
He added that chronic uncertainty over US stimulus measures was also clouding the outlook.
France's President Emmanuel Macron's decision to shut down the country for a month came as Germany said it would impose drastic new curbs as experts warned hospitals would soon be overwhelmed.
With sentiment already dampened by US lawmakers' failure to pass a new stimulus and election uncertainty, the news out of Paris was the last thing investors wanted to hear as the recovery from this year's global financial rout was already stuttering.