European stocks plunge into bear market territory

European stocks plunge into bear market territory

European stocks plunged into bear market territory Monday, with the regional Stoxx 600 index now down more than 20% from recent peaks.

An oil price war isn't helping the mood.

Julian Satterthwaite reports.

Virus fears saw European stocks plunge into bear market territory on Monday (March 9).

As the number of cases rose around the region, benchmark indexes were all down around 7% by lunchtime.

The regional Stoxx 600 is now off more than 20% from its mid-February peak.

That's wiped about three trillion dollars off shares in the region.

French Finance Minister Bruno Le Maire says Europe needs to think big and act fast: (SOUNDBITE) (French) FRENCH FINANCE MINISTER BRUNO LE MAIRE SAYING: "I expect a strong, massive and coordinated response from Europe to avoid the risk of an economic crisis after the epidemic." Oil stocks were among the worst hit Monday.

Shares in BP fell more than 20%.

That after Saudi Arabia and Russia both decided to pump more oil, sending crude prices tumbling by a third.

Riyadh and Moscow are in a battle for market share after falling out over how to respond to a virus-induced drop in demand.

But the equity selloff reached across all sectors, with the European banks index hitting a record low.

Barclays was down over 10%, while France's Societe Generale dropped 16%.

Baader Bank's Robert Halver says government action will now be crucial, not least in Germany: (SOUNDBITE) (German) HEAD OF CAPITAL MARKET ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING: "We are seeing uncertainty and panic and where there is panic people keep their wallets tight to themselves.

No one likes to spend money so economic policies need to make sure that Germans have money in their wallets: tax reductions, early investment projects and consumption incentives.

What we are currently hearing out of Berlin is far too little." Attention too on the European Central Bank, which holds a policy meeting Thursday (March 12).

After rate cuts last week in the U.S., Canada and Australia, the ECB is also expected to loosen policy.

The way sentiment is right now though, it may take more to stop the rot.