The pan-European Stoxx 600 fell 3% by the close, with travel and leisure stocks leading losses on a 6.3% decline. Banks fell 5.8% after U.K. lenders announced they would scrap dividends in 2020 following pressure from the Bank of England.

Markets digested comments from the U.S. on Tuesday when President Donald Trump prepared Americans for a surge in coronavirus cases, saying the U.S. will face a "very, very painful two weeks." White House officials are projecting between 100,000 and 240,000 deaths in the U.S. with coronavirus fatalities peaking over the next two weeks.

Stocks on Wall Street also traded lower on Wednesday as the coronavirus pandemic continued to weigh on sentiment.

On the data front, euro zone manufacturing PMI (purchasing managers' index) readings on Wednesday came in at a 92-month low of 44.5 in March, slightly above expectations but down from 49.2 in February.