The pan-European STOXX 600 index sank 4.6%, sending it back toward near-seven-year lows hit in a massive global sell-off on Monday, with bourses in London and Germany leading declines.

Industrials posted among the heaviest losses following calls for a $60 billion bailout of the U.S. aerospace industry, with JP Morgan analysts saying it will take years for the sector to recover.

Airbus tumbled 19.8% to its lowest since 2016, bringing its total declines in the quarter to nearly 60%. MTU Aero Engines and Rolls Royce plunged between 20.7% and 14.7%.

“Right now the predominant concern is that all the shutdowns of just about everything is going to lead to a recession,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

“Those fears (are) far outweighing everything else.”

European shares have lost more than 30% since hitting a record high mid-February as some countries in the bloc imposed national lockdown to halt the spread of COVID-19, the disease caused by the novel coronavirus.

Italy’s prime minister on Tuesday declared the virus was causing a “socio-economic tsunami” as European leaders agreed to seal off external borders.

Following dramatic monetary easing by the world’s biggest central banks, U.S. President Donald Trump pressed on Tuesday for a $1 trillion stimulus package as many other governments looked to fiscal stimulus.

Equity markets in Europe had closed Tuesday higher on the back of a bumper stimulus package from Spain, but optimism faded quickly as a wave of companies laid out more details of the damage from the shutdowns.

British IT company Micro Focus International slumped 13.9% after scrapping its final dividend. [.L] Volkswagen (VOWG_p.DE) said it would halt production at three Polish plants, while a handful of British pub and restaurant operators said they were seeking leeway on debt arrangements with their banks.

Even traditional safe-haven assets were pressured as battered investors tried to offload their damaged positions. Wall Street’s main indexes slumped at the open, with the Dow Jones Industrials down almost 5%.

Energy stocks tumbled 7.6% as oil prices plunged to their lowest since May 2003. [O/R]


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