UPDATE 3-$474 bln erased from European stocks as virus fears reach fever pitch

* Airlines lead declines on STOXX 600
* Italy now host to Europe's worst coronavirus outbreak
* German shares shrug off pick up in business morale
* ECB interest rate cut bets rise

(Adds details, updates quote, prices)
By Ambar Warrick and Sagarika Jaisinghani
Feb 24 (Reuters) - A rush of coronavirus cases outside China
wiped nearly $474 billion off the value of European stock
markets on Monday, as investors reassessed the likely impact of
the outbreak turning into a pandemic.
A 5.4% slump saw Milan shares .FTMIB marking their worst
day since mid-2016, as Italy reported the biggest flare-up of
the virus in Europe with at least six deaths and more than 200
infections, which is likely to further upset the country's
already ailing economy. The pan-European STOXX 600 .STOXX dropped 3.8% to 411.86,
posting its biggest intra-day percentage slump since Britain
voted to exit the European Union in June 2016. A surge in infections in South Korea and Iran prompted
widespread moves out of equities and into safe havens.
MKTS/GLOB
"Today signifies that markets did not expect this to become
a major issue outside of China," said Craig Erlam, a senior
market analyst at Oanda. "Investors are going to be far more
sensitive now."
"Arguably (there's been) an element of complacency over the
course of last month because there's just been a general belief
that it will get better - this kind of mentality has not
helped."
Both European and U.S. stock markets have been on a
decade-long bull run since the financial crisis, and the
benchmark European index was trading at record highs as recently
as last Wednesday, confident that the outbreak's impact would be
limited to China.
Airlines were among the worst performers on the STOXX 600,
with EasyJet EZL.L , Ryanair RYA.I , Air France AIRF.PA and
Lufthansa LHAG.DE down between 7.4% and 12.6%. Europe's travel
& leisure index .SXTP tumbled 6% and was the weakest regional
sector.
Broad-based declines on the index sent luxury goods makers,
miners, automakers, chipmakers and banking shares - which all
tend to be tightly sensitive to expectations of global growth -
down between 4% and 6%.
Fears of the economic impact from the outbreak bolstered
expectations - already at 50% - that the European Central Bank
will cut interest rates by 10 basis points in July. German shares .GDAXI fell 4%, shrugging off an Ifo survey
that showed business morale rose unexpectedly in February.
Juventus JUVE.MI slumped 11.8% after the Serie A leader
posted a net loss of 50.3 million euros in the first half,
compared to a profit a year earlier. Bank of Ireland BIRG.I fell 5.2% after its underlying
pretax profit fell for the fourth successive year and the lender
added it would take longer than forecast to hit a return on
tangible equity (ROTE) above 10%. Only six stocks on the STOXX 600 ended higher for the day,
led by educational services provider Pearson Plc PSON.L as it
bounced back from a steep fall on Friday.