Investor sentiment was slammed with the number of infected and dead still surging in Europe and the US, while hopes are fading that strict containment measures keeping billions of people at home will be lifted any time soon.
London's FTSE 100 index lost 3.3 percent to 5,484.80 points, hit additionally as top UK bannks axed billions of pounds (dollars) in shareholder dividends and stock buybacks after the Bank of England requested the move to boost liquidity and safeguard against virus turmoil.
In the eurozone meanwhile, Frankfurt's DAX slid 3.0 percent to 9,637.30 points and the Paris CAC 40 shed 3.1 percent to 4,261.63.
"The FTSE 100 kicked off the day on a deeply negative (stance) as a growing number of cases in New York -- the new epicentre of the virus after having surpassed the number of cases in Wuhan -- hints that the contagion and the death toll in the US will likely accelerate over the next couple of weeks," Swissquote Bank analyst Ipek Ozkardeskaya told AFP.
"Hence, slower activity in the US will likely lead to a further negative revision in company valuations worldwide."
Emergency field hospitals were meanwhile readied in New York's Central Park and at the home of the US Open tennis tournament as the number of American deaths from the coronavirus pandemic surged past 4,000 -- higher than the toll in China.
The pandemic has killed more than 1,700 New Yorkers and President Donald Trump, a native of the city, warned in Washington of "a very, very painful two weeks" to come for the entire country.
In London on Wednesday, the Bank of England said that its Prudential Regulation Authority division had asked UK lenders to stop dividend payments until the end of 2020.
It also expected them not to pay any cash bonuses to top staff.
In response, Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland, Santander and Standard Chartered all stated that they will cancel dividends and not pursue share buybacks.
"UK banks, as many businesses across the world, are scrapping dividends due to an increased need of cash to survive the coronavirus crisis in the short run," said Ozkardeskaya.
"Even if we may see a negative knee-jerk reaction from investors, the decision to hold onto the cash is the right one from a medium- and long-term perspective.
"In this respect, we expect to see a certain level of tolerance for ditched dividends."