European stocks close down 5%, airline stocks tank as EU proposes travel restrictions

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European markets slid on Monday as much of the region went into shutdown mode to prevent the spread of the new coronavirus.

The pan-European Stoxx 600 provisionally closed 5.1% lower, off lows hit earlier in the session. Travel and leisure stocks plummeted around 10% to lead losses as all sectors and major bourses ended the day in the red.

Spain’s IBEX was around 8.3% in the red and Italy’s FTSE MIB was down over 6%. France’s CAC 40 provisionally ended 5.9% lower. Germany’s XETRA DAX closed 5.3% in the red as the U.K.’s FTSE 100 finished 4.7% lower.

Markets spent the day reacting to the shutdown taking place on the continent.

Spain has imposed a 15-day nationwide lockdown, banning its 46 million citizens from all-non essential movement. The country imposed the state of emergency decree, as it confirmed the highest number of COVID-19 cases in Europe, after Italy. France and Germany have already closed large parts of their economies and fortified borders as they step up their efforts to contain the spread of the coronavirus.

Meanwhile, on Monday afternoon, Ursula von der Leyen, European Commission president, proposed banning most foreign visitors into Europe for 30 days.

The U.K. government is now facing growing calls to take more drastic measures.

Markets were also reacting to the U.S. Federal Reserve’s surprise move Sunday; the Fed slashed its benchmark interest rate to zero and launched a massive quantitative easing program in an emergency move.

Wall Street sold off rapidly at Monday’s open, with the Dow, S&P 500 and Nasdaq all dropping more than 9% and triggering a “circuit breaker” to halt trading for 15 minutes. The major averages had pulled off their session lows by mid-morning.

Airlines and travel companies continued to suffer on Monday, although by the end of the day had pared some losses. Tui shares ended down around 13%, EasyJet shed 19%, Air France KLM fell 10% and British Airways parent IAG tumbled 27% after hitting 52-week lows.

Investec shares dived 38% to the bottom of the European benchmark after its asset manager Ninety One listed on the London Stock Exchange (LSE) at a much lower price than anticipated amid the current market volatility.