European stocks were headed for their worst fall in three months today as fears that a second wave of Covid-19 infections would lead to new social distancing measures hit travel and leisure shares and banks amid a new dirty money scandal.

Shares in London were down 3.3%, while the markets in Paris and Frankfurt were both 3.2% lower this lunchtime. 

The Dublin market had dropped 3.7% this lunchtime, with Irish banking shares lower. 

Europe's travel and leisure index fell 5.7%, its worst drop since April with airlines such as Aer Lingus and British Airways owner IAG retreating 13.5% and Lufthansa by 8%. 

Shares in Ryanair had dropped over 6% in Dublin trade this lunchtime.

European banks fell over 6% following reports that banks such as HSBC and Standard Chartered were among those moving large sums of allegedly illicit funds over the past two decades.

HSBC's shares in Hong Kong and Standard Chartered's in London fell to their lowest since at least 1998.

The falls came after media reports that they and other banks, including Barclays and Deutsche Bank, moved large sums of allegedly illicit funds over nearly two decades despite red flags about the origins of the money. 

Barclays and Deutsche Bank, which were also mentioned in the reports, fell 5.6% and 5.8%, respectively.

A report from China's state-run Global Times also suggested that HSBC could be a possible candidate for inclusion in the country's "unreliable entity list" that targets foreign firms which violate Chinese laws or commit "illegal acts". 

Earlier in Asian trade, the Hang Seng index in Kong Kong slumped 504 points (2%) to finish at 23,950 on concerns about fresh coronavirus spikes that are forcing governments to reimpose economy-damaging containment measures. Markets in Tokyo are closed for the "Old Age Day" national holiday.