European shares end lower after 'flash crash' scare    

Data released over the weekend showed factory activity in China contracted more than feared in April as widespread Covid-19 lockdowns halted industrial production and disrupted supply chains. 

European stocks closed lower today, in a session that marked sharp losses after a sudden brief crash, while downbeat China factory data sparked worries of a sharp economic slowdown.

The pan-European Stoxx 600 index dropped 1.5%, set to snap a three-day session of gains. The index fell as much as 3% earlier in the day, and the Stockholm benchmark stock index shed 8% in what brokers said was a "flash crash" or an erroneous trade. 

Data released over the weekend showed factory activity in China contracted more than feared in April as widespread Covid-19 lockdowns halted industrial production and disrupted supply chains. 

China-linked sectors such as cars, luxury, chipmakers and industrials dragged on the main index.

"While we can expect further supportive measures from Beijing over the coming months, the virus restrictions would likely pose a downside bias to the economic activities," Commerzbank analysts said. "The growth outlook still looks challenging."

Wall Street was mixed today, with the tech-heavy Nasdaq edging higher as growth stocks rebounded after April's rout. The US Federal Reserve is scheduled to meet this week, with traders betting on a 50-basis-point rate hike to combat rapid inflation.

Worries over China's rigid Covid restrictions, the conflict in Ukraine and expectations of aggressive US monetary policy tightening have stoked concerns of a sharp slowdown in the global economy, pulling the Stoxx 600 down 9% on a year-to-date basis. 

• Reuters