European stocks close 7% lower and enter bear market territory as oil prices crash

• Stocks worldwide fell sharply Monday as oil prices plunged after OPEC failed to strike a deal with its allies on production cuts.
• The declines were exacerbated by fears surrounding the coronavirus spread.

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

European markets

The pan-European Stoxx 600 provisionally ended the day over 7% lower at 340.83 — that's down more than 20 percent from its year high of 433.90 meaning it's in bear market territory. Oil and gas stocks plunged over 16% to lead losses as all sectors and major bourses declined 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.

Stateside, the Dow Jones Industrial Average tanked 1,567 points on pace for its worst day since December 2008, while the S&P 500 plunged 5.7%. It comes after trading on Wall Street was halted for 15 minutes after the S&P 500 sank 7% at the start of the session.

Oil prices plunged more than 20% after OPEC's failure to strike a deal with its allies on production cuts caused Saudi Arabia to slash its prices and reportedly get 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 plan. 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 is also dominating market sentiment. More than 109,000 people have now been infected by the virus and more than 3,700 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.

Italy's FTSE MIB closed over 11% lower, while Germany's DAX ended the day down almost 8%. France's CAC 40 slipped 8.4%.

The U.K. government held an emergency meeting Monday to discuss further measures to halt the spread of the virus.

Oil stocks capitulate

Energy giant BP plunged over 19% and Royal Dutch Shell was 17% lower at the close, as oil stocks took a hammering.

Tullow Oil fell over 30%, while TGS-NOPEC, Aker BP, Lundin Petroleum, Saipem and Subsea 7 shares all ended the day more than 20% lower.

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