European markets tanked on Monday as global investors brace for the spread of the coronavirus and oil prices fall after the collapse of OPEC talks.

The pan-European Stoxx 600 dropped 6.8% in early trade to enter bear market territory, with oil and gas stocks plunging 13.7% to lead losses as all sectors and major bourses fell sharply.

Stocks in Asia saw steep declines on Monday afternoon as oil prices plunged after OPEC failed to strike a deal with its allies on production cuts. The declines in markets in the region were exacerbated by fears surrounding the coronavirus spread.

Oil prices plunged more than 30% after OPEC’s failure to strike a deal with its allies regarding production cuts caused Saudi Arabia to slash its prices as it reportedly gets set to ramp up production. That’s led to fears of an all-out price war.

Saudi Arabia’s price cut followed a breakdown of talks in Vienna last week. On Thursday, OPEC recommended additional production cuts of 1.5 million barrels per day starting in April but OPEC ally Russia rejected the additional cuts. With no deal in place when the current one expires at the end of the month, producers could soon pump as much oil as they want.

Coronavirus continues to dominate market sentiment too. More than 106,000 people have now been infected by the virus and more than 3,600 have died globally, according to the latest figures from the World Health Organization. U.S. cases have now topped 500 and at least 21 deaths have been reported.

Meanwhile, the number of confirmed cases in Germany jumped by more than 100 over the weekend and is now up to nearly 800. Italy remains the European country with the worst outbreak, with over 7,000 cases. The U.K. government is holding an emergency meeting Monday to discuss further measures to halt the spread of the virus.

On the data front, Germany releases monthly industrial output figures; there are no major earnings Monday.

Oil stocks capitulate

Energy giant BP plunged 18% and Royal Dutch Shell 21% in early trade as oil stocks took a hammering. Britain’s Tullow Oil fell 37%.

TGS-NOPEC shares fell 24.8% while Aker BP and Wood Group both dropped 23%.

— CNBC’s Eustance Huang and Pippa Stevens contributed reporting to this story.

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