UPDATE 2-Cyclical stocks knock Europe as virus fears resurface

(For a live blog on European stocks, type LIVE/ in an Eikon
news window)
* ArcelorMittal slides after Moody's downgrade
* Wirecard jumps after management reshuffle
* EasyJet, IAG tumble as Britain to quarantine travellers

(Updates with closing price)
By Sruthi Shankar and Joice Alves
May 11 (Reuters) - European stocks closed lower on Monday,
with banks, miners and travel stocks bearing the brunt of
investor worries of a second wave of coronavirus cases as many
countries emerge from lockdowns.
The pan-European STOXX 600 .STOXX shed 0.4% after gaining
nearly 1% at the open, when a post-holiday catch-up for UK
shares supported markets.
As the session wore on, cyclical sectors - more exposed to
the health of the global economy - took a hit as investors
focused on news that Germany and South Korea reported an
acceleration in new coronavirus infections after steps to ease
their restrictions. That dented optimism as France tiptoed out of one of
Europe's strictest lockdowns, while British Prime Minister Boris
Johnson set out a cautious plan to get Britain back to work.
Russ Mould, investment director at AJ Bell, said markets
were realising the end of lockdown would be quite gradual and
"the V-shaped recovery will not be as fast as expected".
"Indications that countries like Germany and South Korea are
seeing an increase in infections is likely to give markets some
pause for thought," he added.
Europe's mining index .SXPP led losses as shares in the
world's largest steelmaker, ArcelorMittal MT.AS , slumped 16.2%
after Moody's downgraded its rating to Ba1 as the credit rating
agency expects economic conditions to materially worsen in 2020
due to the pandemic.
Returning from a holiday-extended weekend, Britain's FTSE
100 .FTSE closed flat and mid-cap shares .FTMC rose 0.1%,
catching up with a global rally on Friday on easing U.S.-China
tensions. .L
However, shares in Britain's low-cost carrier easyJet
EZJ.L fell 6% and British Airways-owner IAG ICAG.L dropped
3% as the British government said it would introduce a 14-day
quarantine period for most people arriving from abroad.
French stocks .FCHI took a hit as Airbus SE AIR.PA
dropped 2.8% after Australia's Qantas Airways QAN.AX said it
did not expect to take delivery of any new planes in the near
term as it grapples with a plunge in demand due to the pandemic.
Aircraft engines maker Safran SAF.PA dropped 3.2%.
Despite a feeble start to the month, European shares have
recovered more than 26% since mid-March lows as investors pinned
their hopes on a swift economic recovery after countries started
to ease lockdowns and policymakers' support to ailing economies.
That helped markets look past a staggering 20.5 million U.S.
job losses in April, while Germany's Ifo institute said that
many industries were cutting jobs, noting that 39% of automotive
companies, 50% of hotels, 58% of restaurants and 43% of travel
agencies had shed staff in April. Among gainers, German payments company Wirecard WDIG.DE
jumped 8.3% after announcing a reshuffle of its management board
amid allegations including accounting irregularities and
disclosure violations, which it denied. Frankfurt-listed real estate firm LEG Immobilien LEGn.DE
gained 3.8% after it confirmed its earnings forecast for 2020
after reporting first-quarter results.
Italian lenders .FTIT8300 bucked the gloom in Europe's
banking sector .SX7P with a 0.6% rise, on relief that Moody's
spared the country of a rating downgrade on Friday.