European stocks traded sharply lower on Monday as the impact of the spreading coronavirus on the world economy offset dramatic efforts by the U.S. Federal Reserve to limit the fallout.

The Stoxx Europe 600 SXXP, -0.66% , which fell 18% last week, slumped about 5%, though it did close above its worst levels of the day.

The major indexes also were hammered, with the German DAX DAX, -0.69% , French CAC 40 PX1, -1.21% and U.K. FTSE 100 UKX, -0.70% each retreating.

The number of Italian COVID-19 cases surged as the U.S. expanded a travel ban to the U.K. and Ireland, Germany announced it was partially closing its borders, France closed its famous cafes and restaurants and the Netherlands ordered its weed-selling coffee shops to shut.

The Federal Reserve on Sunday cut interest rates to nearly zero and said it would buy back $700 million of Treasurys and mortgage-backed securities.

“The Fed measures make it easy for depository institutions to access very cheap credit, but it is unclear how much this credit easing will extend to corporates and households,” said Steve Englander, head of global G10 FX research and North America macro strategy at Standard Chartered Bank’s New York branch. The Bank of Japan meanwhile expanded its purchases of assets.

International Consolidated Airlines Group IAG, -14.60% , which delayed an executive handover and said it will cut capacity in April and May by 75%, fell 26%.

TUI TUI, -4.09% , the London-listed tourism company, dropped 11% after it said it was halting the vast majority of its operations.

H&M HM.B, -1.68% , the Swedish retail chain, said its Chinese sales went from rising 27% through Jan. 23 to ending the Feb. 29 quarter with a 24% decline. In China sales have gradually started to recover as the situation in the country has improved, H&M said.

But now it’s facing a European problem — H&M said all of the group’s stores are temporarily closed in Italy since the past few days and during the weekend all stores were also closed temporarily in Poland, Spain, the Czech Republic, Bulgaria, Belgium, France and partly in Greece. All of the group’s stores in Austria, Luxembourg, Bosnia-Herzegovina, Slovenia and Kazakhstan are closing from Monday.

Associated British Foods ABF, -2.48% said stores representing 30% of its Primark sales have halted, though its sugar, grocery, ingredients and agriculture businesses have not been materially affected.