(Bloomberg) -- European stocks snapped a two-day advance as the death toll from the coronavirus rose over the weekend and country leaders tightened restrictions.
The Stoxx Europe 600 Index closed down 4.3%. The benchmark initially trimmed losses after the Federal Reserve said it would buy as much government-backed debt as needed, before dropping in afternoon trading as investors awaited progress on a U.S. stimulus bill in Congress.
“In the current situation, the state or the central banks will not be able to save all companies,” VP Bank AG Chief Economist Thomas Gitzel said. “State aid and the support of the central banks alleviate the pain, but they do not heal the economic wound in the short term.”
European leaders over the weekend enforced even stricter curbs on people’s movements, while the death toll rose from Spain to Italy. The drop on Monday follows five weeks of losses spurred by worries about the virus. With a two-day advance through Friday providing a brief respite after the European Central Bank’s bond-buying program, the Stoxx 600 is still above an intraday low reached March 16.
Most Stoxx 600 sectors fell on Monday, with oil and gas shares the notable exception as companies from Royal Dutch Shell Plc to Total SA unveiled cost-cutting plans to weather a price slump in crude and lower demand. Travel and leisure shares -- the worst hit in the current sell-off -- slid 7.7%, while miners also lagged.
While equities have tumbled on worries about the economic damage of the virus, a recession is not yet overdiscounted, JPMorgan Chase & Co. strategists wrote in a note. The MSCI World Index of developed-market stocks fell more in two of the past three recessions, they said.
The Greek ASE Index slid 7.6%, following a delayed open because of technical problems.
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