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* BP, Shell, Total slide around 20%
* STOXX 600 on course for worst day since 2016
* Italy locks down millions as coronavirus deaths jump
(Adds comment, updates prices)
By Sruthi Shankar
March 9 (Reuters) - European shares slumped across the board
on Monday, taking the benchmark STOXX 600 into bear market
territory as a lockdown of northern Italy due to the coronavirus
outbreak and a 30% plunge in oil prices amplified fears of a
global recession.
The pan-European STOXX 600 fell 7%, meeting the
common criteria for a flip into a more negative "bear"
environment - a 20% drop from all-time highs. The index is on
course for its biggest percentage drop since June 2016, when
Britain voted to exit the European Union
London's commodity-heavy FTSE 100 was down 8%, with
shares of oil majors BP and Royal Dutch Shell
both down almost 20%. The top decliner on the STOXX 600 was
Tullow Oil, with an eye-popping 38% drop.
Europe's oil & gas index tumbled 13.5%, with crude
prices in free fall after Saudi Arabia launched a
price war with Russia and U.S. shale producers by slashing its
official selling price and putting in place plans for a dramatic
increase in crude production next month.
"Wild is an understatement," said Chris Brankin, chief
executive at TD Ameritrade. "I figured maybe we'd see a 5% or
10% drop in the oil market, but 25% down has literally just
spooked the rest of the market."
All sectors were deep in the red, with growth-sensitive
miners, automakers, banks, insurers
falling between 7% and 10%. Defensive sectors,
considered safer during times of economic uncertainty, posted
minimal losses.
European firms have now lost nearly $3 trillion in value
since the rapid spread of the coronavirus sparked a worldwide
selloff in February.
Italy has become the continent's frontline in the crisis
after the government ordered a virtual lockdown across much of
its wealthy north, including the financial capital Milan, in a
drastic new attempt to try to contain the outbreak.
Traders are betting the European Central Bank will cut
interest rates at a meeting on Thursday, following moves by
central banks in the United States, Canada and Australia last
week to soften the blow of the outbreak.
In the starkest warning sign of adverse economic impact -
yields on 10-year U.S. Treasuries, the benchmark for
global borrowing costs and the safest of safe havens for
investor capital, dropped to 0.4258% - a record low.
German 10-year bond yields fell to a new record
at -0.8%.
Shares in Italy's blue-chip index dropped 11%,
while Spain saw its main equity index drop 6%.
(Reporting by Sagarika Jaisinghani and Sruthi Shankar in
Bengaluru; additional reporting by Tom Westbrook in Singapore;
editing by Patrick Graham and Bernard Orr)
