World stock markets fell Tuesday as fears resurfaced over a spike in coronavirus infections around the world, dealers said, but London losses were limited despite grim UK economic output data, dealers said.

In Europe, Frankfurt stocks dived 1.5 percent and Paris shed 1.8 percent, with sentiment hit by the reimposition of some containment measures in parts of the United States, Australia and Hong Kong. London traded only a shade lower as the British pound slid on official data showing that the virus-plagued UK economy shrank by almost a fifth in the three months to April.

A weaker British currency tends to boost share prices of companies listed in London who earn vast sums in dollars. World oil prices meanwhile fell further on growing speculation that top crude producing nations will agree to tapering their output cuts at an expanded OPEC+ meeting this week.

In Asia, Hong Kong fell more than one percent, Shanghai dropped 0.8 percent and Tokyo lost 0.9 percent, after a Wall Street rally fizzled Monday on more COVID-19 troubles in the United States. "A late sell-off on Wall Street spilled over into Asia and is dragging on European stocks," said City Index analyst Fiona Cincotta. "Sentiment soured on Wall Street after the state of California imposed new restrictions on business as coronavirus cases spiral out of control and hospitalisations soar. The shutdown fuels fears that the growing number of coronavirus cases will hamper the fragile economic recovery.”

The tech-rich Nasdaq Composite Index, which has surged to repeat records in recent weeks, tumbled 2.1 percent following the announcement California was imposing fresh restrictions to address the coronavirus.

California, the richest of the US states, ordered all indoor restaurants, bars and movie theatres to re-close, while churches, gyms, shopping malls, hair salons and non-essential offices have been told to shut up shop in several densely populated counties, including Los Angeles.

The measures follow new restrictions imposed in Texas, Arizona, Florida and other major states. Meanwhile, Hong Kong on Monday announced sweeping new measures as the city suffers a relapse. Melbourne is already under a new lockdown and there are signs of new outbreaks in Sydney.

After hitting lows in March, markets have been surging thanks to government support and optimism that the world economy will bounce back as crippling lockdowns are eased.  But a worrying increase in new virus cases across the planet has forced governments to revert to measures aimed at preventing the disease's spread.

News that Singapore's economy, considered a regional barometer in Asia, contracted a mind-boggling 41 percent in the second quarter also provided a stark reality-check for traders on Tuesday. Singapore was 0.2 percent down after figures showed the city-state's trade-dependent economy plunged into recession for the first time in a decade as it contracted a record 41.2 percent on-quarter in April-June and 12.6 percent on-year.

The worse-than-expected figures will ring alarm bells for Asia's many trade-dependent economies as Singapore is typically hit first before ripples spread across the region.

Key figures around 1100 GMT

London - FTSE 100: DOWN 0.2 percent at 6,162.53

Frankfurt - DAX 30: DOWN 1.5 percent at 12,607.11

Paris - CAC 40: DOWN 1.8 percent at 4,964.32

EURO STOXX 50: DOWN 1.7 percent at 3,293.51

Tokyo - Nikkei 225: DOWN 0.9 percent at 22,587.01 (close)

Hong Kong - Hang Seng: DOWN 1.1 percent at 25,477.89 (close)

Shanghai - Composite: DOWN 0.8 percent at 3,414.62 (close)

New York - Dow: UP less than 0.1 percent at 26,085.80 (close)

West Texas Intermediate: DOWN 0.9 percent at $39.74 per barrel

Brent North Sea crude: DOWN 0.7 percent at $42.43

Euro/dollar: UP at $1.1350 from $1.1344 at 2100 GMT

Dollar/yen: UP at 107.32 yen from 107.29 yen

Pound/dollar: DOWN at $1.2524 from $1.2556

Euro/pound: UP at 90.63 pence from 90.35 pence