UPDATE 2-European stocks edge up for the day, but mark worst quarter in 18 years

* "I still fear this is just a rally in a bear market"-
analyst
* STOXX 600 down 23% for qtr, marks worst month ever
* Italian stocks mark worst quarter ever, down 27%
* Travel and leisure sector worst qtrly performing sector

(Updates to close)
By Ambar Warrick and Sagarika Jaisinghani
March 31 (Reuters) - European stock markets ended higher
after sporadic moves on Tuesday, clocking their worst quarter in
nearly 18 years following a brutal sell-off on the heels of the
coronavirus outbreak.
The pan-European STOXX 600 index .STOXX closed up 1.7% for
the day, having earlier sunk into negative territory before
settling below intraday highs. Markets took some support from a
drop in new cases in Italy, the worst hit country in Europe.
For the quarter, the STOXX 600 lost 23%, or $2.8 trillion,
with a bulk of losses happening over March, its worst month on
record, as the rapid spread of the coronavirus and the
subsequent measures to combat it all but decimated economic
activity.
The outbreak also resulted in a much more volatile trading
environment, with the regional volatility gauge .V2TX hovering
around levels last seen during the 2008 financial crisis.
However, regional markets have been able to claw back some
of their losses over recent sessions, although analysts remained
sceptical of whether the gains would hold.
"These markets are still extremely volatile and will be
susceptible to (today's) kind of reversals. I still fear this is
just a rally in a bear market but I would love to be proven
wrong," said Craig Erlam, senior market analyst, UK and EMEA at
OANDA.
For the day, energy stocks .SXEP , which are among the
worst hit by the rout, led gains. Still, they lost about a third
of their value over the quarter, their worst ever.
Travel and leisure stocks .SXTP also gained for the day,
but underperformed their peers by a vast margin over the
quarter, losing nearly 43%.
Italian stocks .FTMIB added about 1% for the day, but
marked their worst quarter ever, falling about 27%.
"It is too early to know whether the outbreak in Italy is
truly under control. But even if that becomes more apparent, a
sustained recovery in equity prices there and elsewhere probably
won't happen until there is evidence that the pandemic is being
contained at a global level," Simona Gambarini, markets
economist at Capital Economics, wrote in a note.
German stocks .GDAXI gained about 1%, but lost roughly a
fourth of their value over the quarter.
Among individual movers, Nokian Tyres TYRES.HE topped the
STOXX 600, adding about 18% after Finland increased its stake in
the tyre maker. HelloFresh HFGG.DE jumped 13% to close at a record high
after the German meal-kit delivery firm forecast first quarter
revenue above market expectations. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Euro STOXX 600 vs Volatility index IMAGE https://reut.rs/3aA6Xkr
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