European stock markets headed lower on Wednesday, as investors weighed up plans by governments to prevent economic collapse from the coronavirus pandemic and the EU announced restrictions on foreign travel to stem the outbreak.
The Stoxx Europe 600 index SXXP, -3.81% fell 3.6% to 280.42, after closing up 2.3% on Tuesday. The German DAX 30 index DAX, -4.54% fell 4.6%, the French CAC 40 index PX1, -4.42% dropped 4.2% and the FTSE 100 index UKX, -4.99% dropped 3.8%.
That is as Dow Jones Industrial Average futures YM00, -3.94% hit the lower limits of trading, down 821 points, or nearly 4%, to 20,039, while S&P 500 index ES00, -3.70% and Nasdaq-100 futures NQ00, -4.44% dropped over 3% each. Asian markets finished lower.
Fresh losses came on the heels of an upbeat session on Tuesday, as global governments announced pledges to shore up economies against the coronavirus pandemic. But investors remained jittery that those plans will be 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 to prevent the virus’s spread.
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.
Telecommunications companies were leading the gainers in Europe, with Telefónica TEF, +18.78% TEF, +4.52% up 7.7%, Orange ORA, +6.41% gaining 6%, and Vodafone Group VOD, +12.86% and Deutsche Telekom DTE, -1.70% rising over 2% each.
Drugmakers were under pressure, with shares of Roche Holding ROG, -6.40% down over 5%, AstraZeneca AZN, -5.00%, AZN, +8.31% Sanofi SNY, +5.03% SAN, -6.48% and GlaxoSmithKline GSK, +9.44% GSK, -5.91% all posting losses of 5% or more.