The slump comes despite sweeping US stimulus measures and Chancellor Rishi Sunak unveiling a £350bn emergency rescue package to support businesses and contain the economic damage from the coronavirus pandemic. Panicked EU leaders have warned of a “socio-economic tsunami” sweeping the continent as officials predicted a recession as European nations go into lockdown.

Euro Stoxx 50 futures were down 4.1 percent at levels last seen in 2012 and fell for the ninth time in 10 days.

German DAX futures also tumbled 4.1 percent, while French CAC futures and London’s FTSE 100 futures were off 3.9 percent.

European investor sentiment has been crushed over the past month as a number of countries in the bloc imposed national lockdown to halt the spread of COVID-19.

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

Michael James, managing director of equity trading at Wedbush Securities in Los Angeles, warned of a recession in the wake of the coronavirus.

He said: “Right now the predominant concern is that all the shutdowns of just about everything is going to lead to a recession.

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European airlines and energy firms have been among the biggest decliners in the first quarter as the health crisis halts virtually all travel, crushes oil prices and cripples company finances.

On Wednesday, Zara-owner Inditex became the latest firm to flag a significant blow to its business from the pandemic, saying it would book a provision of €287 million ($316 million) against the outbreak’s impact on its spring/summer inventory position.

It comes after Chancellor Sunak said the Government will do “whatever it takes” to fight the economic shockwaves of coronavirus.

Mr Sunak said: “This is not a time for ideology and orthodoxy.

“This is a time to be bold, a time for courage.”

The Chancellor said he was ready to increase the size of the loan guarantees – already equivalent to 15 percent of Britain’s annual economic output – to ensure cash gets to all companies needing it as their businesses slump.

Other measures announced included extending the recent suspension of a property tax paid by small companies to all businesses in the retail, hospitality and leisure sectors.

He said those companies would also get cash grants as part of a £20 billion increase in direct support for companies, on top of help announced last week, and the government would discuss a support package for airlines and airports.

His announcement comes after Prime Minister Boris Johnson promised to put the country on a “wartime” footing.

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