European shares were stuck near seven-year lows on Monday after several countries expanded measures to curtail the spread of the coronavirus pandemic, with Italy banning even domestic travel as the number of fatalities there topped 5,400.
The benchmark STOXX 600 index was down 4.6 percent at 0806 GMT, with bourses in Germany, Spain and London leading declines.
The relentless spread of COVID-19, the disease caused by the novel coronavirus, has forced entire countries to self-isolate and brought economic activity to a grinding halt, driving the biggest global market sell-off since the 2008 financial crash.
With growing evidence of the corporate damage from paralysed supply chains and consumer spending, analysts have suggested the global economy was already in recession.
Planemaker Airbus fell another 12.7 percent after saying it was withdrawing its 2020 financial forecast, dropping a proposed 2019 dividend and suspending funding to top up staff pension schemes.
Gold prices also fell on Monday as investors stockpiled cash, with rising numbers of coronavirus-led national lockdowns threatening to overshadow stimulus measures from global central banks to combat the pandemic’s economic damage.
Spot gold slipped 0.6 percent to $1,488.35 per ounce by 0641 GMT, after rising as much as 3.1 percent in the previous session on a wave of stimulus.
US gold futures climbed 0.5 percent to $1,491.70.
“For the time being, gold is not serving as a safe-haven because of margin calls and panic. There is capital outflow from everywhere,” said Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade.
“(Investors) are winding up their positions. It’s not technical or fundamental – it’s all panic.”
Asian shares sank as a rising tide of lockdowns threatened to overwhelm policymakers’ frantic efforts to cushion what is likely to be a deep global recession.
Another concern is the possibility of central banks having to sell gold to buy dollars as the greenback continues to strengthen, said Stephen Innes, chief market strategist at financial services firm AxiCorp.
The dollar held near a three-year high against major currencies as fresh declines in global stocks and worries about tightening liquidity amid the worsening crisis accelerated the flight to cash.
The US Federal Reserve continued to roll out emergency support on Friday as it enhanced efforts with other major central banks to ease a global dollar-funding crunch.
Market participants are counting on further policy easing in the next few days as the US Senate mulls a $1 trillion package that would include direct financial help for Americans.
Airlines cancelled more flights as Australia and New Zealand advised against non-essential domestic travel, the United Arab Emirates halted flights for two weeks, and Singapore and Taiwan banned foreign transit passengers.
Meanwhile, nearly a third of Americans were ordered to stay at home to slow the spread of the disease, while Italy banned internal travel as deaths there reached 5,476, and China reported 46 new cases on Sunday that were mostly imported from overseas.
The global death toll from the coronavirus has exceeded 14,000, from more than 300,000 infections.
Spot gold is expected to retest a support at $1,452 per ounce, a break below which could cause a fall to $1,374, said Reuters technical analyst Wang Tao.
Among other precious metals, palladium inched up 0.1 percent to $1,643.24 per ounce, platinum jumped 1.1 percent to $617.86 and silver fell 0.5 percent to $12.52.