UPDATE 4-European stocks record worst daily loss on record

* European Central Bank outlines stimulus but holds off rate
cut
* STOXX 600 closes at lowest since August 2013
* Automobile, insurance stocks lead declines
* Italian stocks post record loss
* FTSE 100 slumped 11% - worst day since 1987

(Updates to close)
By Ambar Warrick and Sagarika Jaisinghani
March 12 (Reuters) - European shares plunged 11.5% on
Thursday, their worst daily loss on record, as responses by
governments and central banks to combat the potential economic
hit from the fast-spreading coronavirus got a cold welcome.
Airline stocks in particular took a major beating all day
after the U.S restricted travel from Europe, while bank stocks
were hard hit amid growing signs of corporate distress.
The absence of a rate cut from the European Central Bank
gave little comfort to bank stocks, which dipped to record lows
again.
The fast-spreading coronavirus, which the World Health
Organisation termed as a pandemic, has spooked risky assets
across the world wiping out more than $15 trillion in less than
month.
The benchmark STOXX 600 index .STOXX has been on a
downward spiral since the outbreak, marking large daily losses
while slipping further into bear territory. A shock crash in oil
prices at the start of the week had also spurred heavy selling.
The index has now lost nearly a third of its value since
mid-February. In another indication of market strife, the Euro
STOXX Volatility Index .V2TX , considered to be a fear gauge
for markets, rose to its highest since the 2008 financial
crisis.
"For the moment we have to consider and we have to admit
that we're staying in this rather turbulent market environment,"
said Philipp Brugger, head of investment strategy at Union
Investment.
"We think the focus should really be on the provision of
liquidity into the financial system, and on the solvency side of
things."
Stocks in Italy .FTMIB , the European country most affected
by the virus, ended nearly 17% lower, their worst session ever.
The Italian government recently initiated a countrywide
lockdown.
Bank stocks were the biggest drag on the Italian index. The
bank-heavy Spanish index .IBEX also shed 14%.
"The issue (for banks) isn't so much on the supply side for
credit, but on the demand side between the virus, the oil shock.
The message that the market is hearing is that the demand side
of the economy is definitely going to slow down more," said
Donald Calcagni, chief investment officer at wealth manager
Mercer Advisors.
"What's it going to take to put a floor under this - we need
to see new cases in Italy begin to level, to plateau, like in
China."
Automobile .SXAP and insurance stocks were the worst
performing regional subindexes for the day, shedding more than
15% each.
Travel and leisure stocks .SXTP ended down 13.2% as
airlines Air France KLM AIRF.PA , Lufthansa LHAG.DE and
British Airways-owner IAG ICAG.L plummeted in wake of the
travel restriction.
Lufthansa closed 14% lower, ending at a near eight-year low
as the epidemic forced it to halt the sale of the international
operations of its airline caterer LSG. Norwegian oil equipment provider TGS NOPEC Geophysical Co
TGS.OL was the sole gainer on the STOXX 600, rising about
1.2%.

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V2TX versus STOXX 600 https://tmsnrt.rs/33eIsGH
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