European stocks extend recovery gains

Europe's main stock markets rebounded by more than 3.0 per cent Tuesday, one day after suffering their biggest losses in more than a decade on crashing oil prices and coronavirus fears.

However trade was volatile as investors tried to get a grip on a changing news flow, with positive reports of progress in China on the virus clashing with a Saudi decision to increase oil output in an already over-supplied market.

In early morning trade, London's benchmark FTSE 100 index of major blue-chip companies was up 3.1 per cent at 6,151.93 points, aided by an initial modest recovery in oil prices which began to slip on the Saudi announcement.

In the eurozone, Frankfurt's DAX 30 added 3.0 per cent to 10,947.03 points and the Paris CAC 40 gained 3.3 per cent to 4,864.77.

In Milan, the FTSE MIB was up 3.0 per cent at 19,036.89 points after plunging more than 11 per cent Monday as the government unveiled more drastic measures to curb the coronavirus outbreak there.

Italy is the most affected country after China and overnight the government announced the entire country would be locked down.