European equities haven't had such a bad day since the aftermath of the Brexit vote more than three years ago, as increasing concerns over the economic impact of the coronavirus hurt travel and luxury sectors, and volatility spiked.

The Stoxx Europe 600 Index closed down 3.8% after falling as much as 4.2% in the sharpest drop since June 27, 2016, led by the travel, mining and auto sectors. Today's move also wiped out the year-to-date gains for the Stoxx 600. The Euro Stoxx 50 Volatility Index surged as much as 49%, the most since the so-called "Volmageddon" of February 2018 -- when Wall Street was rocked by a surge in volatility and a sell-off in stocks.

Luxury companies tumbled on fears that the epidemic will hurt sales, with LVMH Moet Hennessy Louis Vuitton SE losing 4.7% and Roche Holding AG dropping 3.2%. The Stoxx 600 Travel and Leisure Index fell 6%, with Air France-KLM declining 8.7%, EasyJet Plc tumbling 17% and Ryanair Holdings Plc losing 14%.

"Markets are in a risk-off mode amid concerns about the global spread of coronavirus, with a growing number of infections outside of China," said Ulrich Urbahn, head of multi-asset strategy and research at Joh Berenberg Gossler & Co., which recently cut its exposure to commodities and favors quality European stocks. "Given the strong performance and elevated positioning in equities, the risks are clearly skewed to the downside."

The US stock market extended the global slump, with the S&P 500 falling as much as 3.2% and the Nasdaq 100 losing up to 4.4%.