(Reuters) - European shares closed firmly in the red on Wednesday, ending a five-day rally as the first batch of earnings reports underlined the business damage from the coronavirus pandemic, while energy stocks sank on worries of a plunge in oil demand.

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, April 15, 2020. REUTERS/Staff

Declines for Total SA TOTF.PA, Royal Dutch Shell Plc RDSa.L and BP Plc BP.L sent the European energy index .SXEP to its lowest point this month as oil prices were hit by forecasts of global demand crumbling to its worst levels in a quarter of a century.

The pan-European STOXX 600 index .STOXX slipped 3.3%, after having risen almost 8% since April 6 on early signs the health crisis was ebbing and on hopes that sweeping lockdown measures would soon be lifted.

The benchmark index has recovered about 22% since hitting an eight-year low in March, but is still down almost 26% from a record high hit in mid-February, and analysts warned an uptick in coronavirus cases could spark another sell-off.

“Much of the ground that European equities have made since mid-March was fuelled by rescue schemes and, more recently, the levelling-off of the rate of infections, but traders are facing up to the prospect of a painful economic downturn,” said David Madden, market analyst at CMC Markets in London.

U.S. majors JPMorgan Chase & Co JPM.N and Johnson and Johnson JNJ.N kicked off the first-quarter earnings season on Tuesday with glum forecasts for 2020 as the pandemic crushed business activity and erased liquidity.

ASML Holding NV ASML.AS, a key European supplier to chipmakers such as Samsung and Intel, fell 3.2% after reporting worse-than-expected earnings on Wednesday.

Dutch navigation and digital mapping company TomTom TOM2.AS shed 4.9% after saying it expected negative free cash flow this year and lower revenue from its automotive and consumer businesses.

Overall, analysts expect earnings for STOXX 600 firms to slide 22% in the first quarter and 34.2% in the second, deepening a corporate recession even as some economies consider lifting strict stay-at-home orders.

“It is too early for governments to re-open their economies and if they do so, it must be a slow procedure in order to avoid a new flare up,” said Charalambos Pissouros, a market analyst at JFD Group.

French shares .FCHI fell 3.8% as France became the fourth country to report more than 15,000 deaths due to the coronavirus after Italy, Spain and the United States.

Britain's domestically focused mid-cap index .FTMC slumped another 4.6% on signs the country was heading for a longer lockdown and forecasts the economy could be facing its deepest recession in 300 years.