UPDATE 2-European stocks knocked lower by virus, tariff fears

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* STOXX 600 near one-week low
* Cyclical sectors lead declines
* IMF predicts deeper global recession due to pandemic
* Dialog Semiconductor lifts forecast, shares jump

(Updates to market close)
By Sruthi Shankar
June 24 (Reuters) - European stocks slumped to a one
week-low on Wednesday as a surge in coronavirus cases and news
that U.S. was weighing tariffs on European products dashed
investors hopes of a speedy economic recovery.
The pan-European STOXX 600 .STOXX closed 2.8% lower,
recording its second worst fall this month. Economically
sensitive cyclical sectors such as travel & leisure .SXTP ,
automakers .SXAP , oil & gas .SXEP and banks .SX7P led
declines, falling between 3.7% and 4.7%.
Many U.S. states saw record daily increases in COVID-19
infections amid easing of lockdowns, while a media report that
European Union countries are prepared to bar entry to Americans
raised worries of fresh restrictions. Further adding to woes, the United States may modify duties
on a range of EU products and was weighing tariffs on other
products from Britain, France, Spain and Germany that have an
approximate value of $3.1 billion, according to the Office of
the U.S. Trade Representative. "Coming at a particularly difficult time for markets, this
breakdown in relations provides another reason for traders to be
cautious about the forthcoming period," said Joshua Mahony,
senior market analyst at IG.
Investors piled into risky assets on Tuesday after data
showed improving business activity in France and Germany as well
as on White House reassurances about the Phase One U.S.-China
trade deal.
But European Central Bank chief economist Philip Lane said
that solid data may not be a good guide to how the euro zone
recovers from the crisis and the International Monetary Fund
predicted a deeper damage to global output. Germany's DAX .GDAXI slumped 3.4% even as the Ifo
institute's survey showed the strongest rise ever recorded in
the country's business morale in June. The top decliner on the STOXX 600 was scandal-hit Wirecard
WDIG.DE , which plunged 28.3% after a slew of negative reports.
Among the few bright spots, Austrian sensor maker AMS
AMS.S rose 6% after JPMorgan upgraded the stock to
"overweight" from "neutral", while Dialog Semiconductor
DLGS.DE jumped 6.4% after raising its quarterly revenue
outlook.
Sweden's Evolution Gaming Group AB EVOG.ST fell about 6%
after it offered to buy NetEnt AB NETb.ST for 19.6 billion
Swedish crowns ($2.12 billion). NetEnt's shares jumped 33%.