UPDATE 3-Europe lockdown fears trigger worst stocks sell-off in 3 months

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* Travel stocks slump as UK ponders national lockdown again
* HSBC drags banks lower after dirty money scandal
* France's Iliad makes $4.2 bln bid for Poland's Play

(Updates to close)
By Sruthi Shankar and Julien Ponthus
Sept 21 (Reuters) - European stocks posted their worst fall
in three months on Monday as fears of a second wave of COVID-19
infections hit travel and leisure shares, while banks tumbled on
a report about $2 trillion worth of suspect transfers by leading
lenders.
There could be up to 50,000 new coronavirus cases per day in
Britain by the middle of October if the pandemic continues at
its current pace, the country's chief scientist adviser warned.
On Sunday, health minister Matt Hancock said a second national
lockdown was possible. "We suspect equities would fall sharply and
indiscriminately, similar to what happened in Feburary-March or
in June ... if the rise in new cases in Europe seriously
undermined the global economic recovery," said Simona Gambarini,
markets economist at Capital Economics.
London's FTSE 100 was the worst-hit blue chip index in
Europe, falling about 3.4% in its worst day in more than three
months. UK-focused midcaps in the FTSE 250 dropped 4.0%.
The pan-European STOXX 600 .STOXX was down 3.2%, a fall
not matched since early June.
Europe's travel and leisure index .SXTP fell 5.2%, its
worst two-day drop since April, with airlines such as British
Airway-owner IAG .ICAG plummeting 12.1% and Lufthansa
LHAG.DE 9.5%.
European banks .SX7P slumped 5.7% to hover near record
lows after lenders including HSBC HSBA.L and Standard
Chartered STAN.L were named in a cache of leaked documents
which said they had transferred large sums of suspect funds over
the past two decades.
HSBC's shares in Hong Kong and Standard Chartered 's in
London fell on Monday to their lowest since at least 1998.
Barclays BARC.L and Deutsche Bank DBKGn.DE , which were also
mentioned in the report, slipped 5.4% and 8.8%, respectively.
On Wall Street, the banking sector .SPXBK fell 4.2% amid a
broader market selloff. .N
Among other individual stocks, Britain's Rolls-Royce
Holdings RR.L shed 10.8% after the aero-engine maker said it
was looking to raise up to 2.5 billion pounds ($3.2 billion) in
an effort to strengthen its balance sheet. German telecom 1&1 Drillisch DRIG.DE plunged 27.8% after
warning that an increase in the cost of its network access deal
with Telefonica Deutschland O2Dn.DE would hit profits this
year. Its parent United Internet DRIG.DE fell 26.1%.
In the latest string of M&A activity, Play Communications
PLY.WA soared 36.7% after French telecoms group Iliad ILD.PA
said it plans to acquire the Polish mobile phone operator in a
3.5 billion euro ($4.15 billion) deal. Iliad slipped 3.0%.
Lufthansa LHAG.DE sank 9.5% as it further cut its fleet
and workforce due to the coronavirus crisis.