Shares slide on Fed outlook, worries of new virus cases

World shares took their biggest tumble in five weeks on Thursday (June 11).

A sobering outlook from the U.S. Federal Reserve the day before challenged investor optimism.

In a reality check to the stock market's recent euphoria, the Fed predicted the U.S. economy would shrink 6.5% this year.

Bonds rallied on bets yet more stimulus would be needed to ensure recovery.

Asia saw a 10-day winning streak come to an abrupt finish and Europe's main bourses all opened with a heavy thud.

Indexes in London, Frankfurt and Paris were all down more than 2.5% in morning deals.

Sensitive sectors such as carmakers, travel and tourism saw a fourth straight day of drops.

The pan-European STOXX 600 fell 2.5%.

Lufthansa slumped as much as 8.8% after it admitted that positions of up to 26,000 employees are surplus to requirements.

TUI and British Airways-owner IAG were also among the top decliners.

Fiat Chrysler fell over 5% and Peugeot-maker PSA over 7%.

That after a report that the carmakers will face a lengthy EU antitrust probe over their planned merger.

Market sentiment also took a hit as new infections in the U.S. showed a slight increase after five weeks of declines

Oil prices also fell nearly four percent amid renewed concerns about demand.

U.S. data showed crude inventories had risen to record highs.