European shares fall for fourth day on growth worries

European shares fell for a fourth straight session on Wednesday, with investors on edge as global recession fears grew, but losses were limited by gains in healthcare stocks.

The region-wide STOXX 600 SXXP closed 0.6% lower, taking cues from Wall Street declines overnight after big U.S. banks cautioned of a likely recession next year.

"There is a sense of nervousness and jitteriness in the markets today," said Victoria Scholar, head of investment at Interactive Investor, citing more volatility as the year-end approaches.

"Markets are not out of the woods yet with headwinds remaining from the gas crisis, inflation, monetary tightening and the threat of recession."

A recent stock rally driven by hopes of a less aggressive Federal Reserve has been tested in recent days after strong U.S. economic fuelled fears that the central bank could keep hiking interest rates for longer.

Markets now await a slew of interest rate decisions, including from the Fed and European Central Bank next week, for further clues on the direction of monetary policy.

On the pan-continent STOXX 600 index, energy stocks (.SXEP) led declines, falling 2.0% as crude prices slid after U.S. data showed an unexpectedly large build in fuel stocks, feeding fears about demand in a market already spooked by an uncertain economy.

Banks (.SX7P) fell for their third straight session, also weighing on the STOXX 600.

Euro zone government bond yields hit fresh multi-week lows amid conflicting signals about when inflation will peak.

A survey showed rising inflation expectations for the year ahead but expectations for three years ahead were unchanged at 3.0%, well above the ECB's 2% target.

Healthcare shares (.SXDP) rose 0.7%. GSK Plc GSK and Sanofi SAN jumped 7.5% and 6.1% respectively, boosting the index after the drugmakers on Tuesday were spared thousands of U.S. lawsuits claiming that the heartburn drug Zantac caused cancer.

Airbus AIR fell 2.2% as the world's largest planemaker abandoned a numerical forecast for jet deliveries and a date for its key production goal.

Euro zone gross domestic product grew slightly more than initial estimates, Eurostat data showed, with household spending and business investment propping up the economy.