Losses compounded for European stock markets on Wednesday, as oil prices slumped and investors fretted that plans by governments to prevent economic collapse from the coronavirus pandemic are lacking.
The Stoxx Europe 600 index XX:SXXP fell 4.8% to 276.97, after closing up 2.3% on Tuesday. The German DAX 30 index DX:DAX slumped 5.4%, the French CAC 40 index FR:PX1 dropped 5.6% and the FTSE 100 index UK:UKX dropped nearly 5%.
Losses were less pronounced in Spain and Italy, where the IBEX 35 index XX:IBEX and the FTSE MIB Italy index IT:I945 fell 3% each.
That is as Dow Jones Industrial Average futures US:YM00 hit the lower limits of trading , where they have remained for hours, down 821 points, or nearly 4%, to 20,039.
Fresh losses came after Tuesday’s upbeat session, as global governments announced pledges to shore up economies against the coronavirus pandemic. But investors remained jittery that global leaders are doing enough. U.S. Treasury Secretary Steven Mnuchin warned late on Tuesday that the U.S. jobless rate could climb to 20% without government action, Bloomberg reported .
The EU announced it will curb most foreign travel for 30 days to stop the virus’s spread , and the U.K. may this week announce its own emergency measures to close ports and airports.
The U.K. announced an unprecedented £330 billion ($397 billion) package to protect businesses and measures to support individuals hit by the pandemic. Measures have also been announced in hard-hit countries like Italy and Spain, which on Tuesday announced a €200 billion relief package to help businesses and individuals.
U.S. stocks rebounded on Tuesday, following White House support for an economic stimulus plan and the Federal Reserve’s moves to provide short-term funding for businesses affected by the coronavirus outbreak.
Read: Trapped in no-man’s-land of coronavirus restrictions, some of Britain’s small businesses are wasting away
The biggest drain on markets was coming from tumbling oil prices, which fell to a 17-year low on Wednesday.
West Texas Intermediate crude for April delivery US:CL on the New York Mercantile Exchange slid $1.68, or 6.2%, to $25.27 a barrel after hitting its lowest level since April 2003. May Brent crude UK:BRNK20 dropped $1.07, or 3.8%, at $27.66, after trading at its weakest since January 2016.
Oil has broken the oil-supply glut support of $25.06, which previous provided a safety net, said Naeem Aslam, chief market analyst at AvaTrade, in a note to clients. “The selloff is extremely intense now and if Saudi Arabia and Russia don’t get their act together, we could see it falling all the way to $22,” he said, in reference to the oil-price war between those countries that has routed oil prices.
Shares of BP US:BP UK:BP and Royal Dutch Shell Group US:RDS UK:RDSA made clear the pain being felt by the sector, with those shares down over 8% each. Airlines again took a huge nosedive, with easyJet UK:EZJ sliding 17%.
Telecommunications companies were among the gainers in Europe, with Telefónica US:TEF ES:TEF up 7.7% and Orange FR:ORA up 6%.
Drugmakers were under pressure, with shares of Roche Holding CH:ROG down over 5%, AstraZeneca UK:AZN , US:AZN Sanofi US:SNY FR:SAN and GlaxoSmithKline US:GSK UK:GSK all posting losses of 4% or more.
On the upside, grocers were climbing as individuals continue to put emphasis on stocking up while lockdowns spread across Europe. Shares of Marks & Spencer Group UK:MKS rose 11%, J. Sainsbury UK:SBRY climbed 10% and Wm Morrison Supermarkets UK:MRW rose 8%.