Inflation in the 19 countries that use the euro currency sagged to 0.7% in March from 1.2% February as the virus outbreak and an oil price war between Saudi Arabia and Russia rippled through the economy.
A key factor in the officials figures published Tuesday was volatile energy prices, which plunged 4.3% from the previous month.
A decline in oil prices since the start of the year has been accelerated by Saudi Arabia's decision to increase production and preserve market share after Russia balked at joining in common cuts among members of the OPEC oil cartel and allied producing countries.
The virus outbreak has led to a wide-ranging decline in economic activity as a wave of business closures and social distancing measures swept over Europe.
Global shares were mostly higher after China reported strong manufacturing data, extending an overnight rally on Wall Street.
France's CAC 40 added 1.5% in early trading to 4,443.47. Germany's DAX gained 2.5% to 10,063.41, while Britain's FTSE 100 jumped 2.2% to 5,685.74.
U.S. shares were set to drift higher, with Dow futures edging up 0.6% to 22,460.20. S&P 500 futures also rose, by 0.7% to 2,645.18.
Still, it was a welcome sign of resilience.
Japan's benchmark Nikkei 225 rose in morning trading but reversed course to dip nearly 0.9%, finishing at 18,917.01. Australia's S&P/ASX 200 also fell back, losing 2.0% to 5,076.80, while South Korea's Kospi picked up 2.2% to 1,754.64. Hong Kong's Hang Seng stood at 23,603.48, up 1.9% and the Shanghai Composite inched up 0.1% to 2,750.30.
India's Sensex jumped 3.6% to 29,467.39. Shares rose in Thailand, Indonesia and Singapore.
An official survey showed China's manufacturing rebounded in March as authorities relaxed anti-disease controls and allowed factories to reopen. But an industry group warned Tuesday that the economy has yet to fully recover.
The purchasing managers' index issued by the Chinese statistics bureau and an official industry group rose to 52 from February's record low of 35.7 on a 100-point scale on which numbers above 50 show activity increasing.
The overnight rally on Wall Street tacked more gains onto a recent upswing for the market, which is coming off the best week for the S&P 500 in 11 years, albeit after falling into bear market territory. Optimism is budding that the worst of the selling may be approaching, but markets around the world are still wary as leaders work to nurse their economies through the pandemic. The S&P 500 remains 22.4% below its record set last month, and oil tumbled to an 18-year low.
"Despite some respite for markets overnight, uncertainty remains as the spread of the COVID-19 virus continues," said Zhu Huani at Mizuho Bank, warning against too much optimism.
"Central banks and authorities continue to step up measures to support the economy."
Sentiment was brightened by news of potential developments in the fight against the coronavirus outbreak.
Johnson & Johnson leaped 8% after saying it expects to begin human clinical studies on a vaccine candidate for COVID-19 by September. Abbott Laboratories jumped 6.4% after saying it has a test that can detect the new coronavirus in as little as five minutes.
Stocks jumped last week after the Federal Reserve promised to buy as many Treasurys as it takes to get lending markets running smoothly and Capitol Hill reached a deal on a $2.2 trillion rescue package for the economy.
"The market wants to see everything line up, and last week everything lined up," said Nela Richardson, investment strategist at Edward Jones, referring to the unprecedented aid from the Fed and Congress.
Now, she said, President Donald Trump also appears to be in sync with health experts about the need to restrict the economy to slow the spread of the virus. Trump on Sunday extended social-distancing guidelines, which recommend against group gatherings larger than 10, through the end of April. Earlier, he had said he wanted the economy open by Easter.
"Now that message is in line," said Richardson. "All these things line up coming into this week, and that's why you saw strong performance last week continuing today."
Economists expect a number of weak reports on the economy to come in through the week. The lowlight will likely be Friday's jobs report, where economists expect to see the steepest drop in the nation's payrolls since the Great Recession.
The number of known infections around the world has topped 780,000, according to Johns Hopkins University. The United States has the highest number in the world, more than 160,000.
Most people who contract COVID-19 have mild or moderate symptoms, which can include fever and cough. But for others, especially older adults and people with existing health problems, the virus can cause pneumonia and require hospitalization.
More than 37,000 have died worldwide due to COVID-19, while more than 160,000 have recovered.
ENERGY: Benchmark U.S. crude added $1.10 to $21.19 a barrel. It fell 6.6% to $20.09 a barrel on Monday, after touching its lowest price since 2002. Oil started the year above $60 and has plunged on expectations that a weakened economy will burn less fuel. The world is awash in oil, meanwhile, as producers continue to pull more of it out of the ground.
Brent crude, the international standard, picked up 72 cents to $27.14 per barrel.
CURRENCIES: The dollar was trading at $108.34, up from $107.76 on Monday. The euro was little changed, at $1.0996 from $1.0995.
Chinese tech giant Huawei said Tuesday its sales of smartphones and other products grew by double digits last year despite U.S. sanctions but warned it now faces a "more complicated" global environment.
Huawei Technologies Ltd. is embroiled in a series of disputes with Washington, which accuses the company of being a security risk. The company denies the accusation, and Chinese officials say the Trump administration is abusing national security claims to restrain a rival to U.S. tech companies.
Huawei is China's first global tech brand and most successful private sector company. Its conflict with Washington has added to tension over Beijing's technology ambitions and trade surplus that prompted President Donald Trump to launch a tariff war with China in 2018.
Last year's sales rose 19.1% over 2018 to 858.8 billion yuan ($123 billion), in line with the previous year's 19.5% gain, the company reported. Profit increased 5.6% to 62.7 billion yuan ($9 billion), decelerating from 2018's 25% jump.
Business "remains solid" despite "enormous outside pressure," Eric Xu, one of three people who take turns as Huawei's chairman, said in a statement.
However, Xu warned, "the external environmental will only get more complicated going forward."
Sanctions approved by President Donald Trump in May will, if fully enforced, cut off access to most U.S. components and technology. Washington has granted extensions for some products, but Huawei founder Ren Zhengfei has said he expects the barriers to be enforced.
The company, the world's No. 2 smartphone brand behind Samsung, said 2019 handset sales rose 15% to 240 million.
Huawei phones can keep using Google's Android operating system but face sales challenges because the American company is blocked from supplying music and other popular services for future models.
Huawei is creating its own services to replace Google and says its system had 400 million active users in 170 countries by the end of 2019.
Establishing its own ecosystem requires Huawei to persuade developers to write applications for its new system, a challenge in an industry dominated by Android and Apple's iOS-based applications.
Huawei also is, along with Sweden's LM Ericsson and Nokia Corp. of Finland, one of the leading developers of fifth-generation, or 5G, technology meant to expand networks to support self-driving cars and other futuristic applications.
The Trump administration is lobbying European governments and other U.S. allies to avoid Huawei equipment as they prepare to upgrade to 5G. Australia, Taiwan and some other governments have imposed curbs on use of Huawei technology, but Germany and some other nations say the company will be allowed to bid on contracts.
Huawei, which says it is owned by the 104,572 members of its 194,000-member workforce who are Chinese citizens, denies it is controlled by the ruling Communist Party or facilitates Chinese spying.
The company responded to Trump's export controls by removing American components from its major products.
The company has unveiled its own processor chips and smartphone operating system, which helps to reduce its vulnerability to American export controls. The company issued its first smartphone phone last year based on Huawei chips instead of U.S. technology.
Huawei also is embroiled in legal conflicts with Washington.
Its chief financial officer, Meng Wanzhou, who is Ren's daughter is being held in Vancouver, Canada, for possible extradition to face U.S. charges related to accusations Huawei violated trade sanctions on Iran.
Separately, U.S. prosecutors have charged Huawei with theft of trade secrets, accusations the company denies.
The company, headquartered in the southern city of Shenzhen, also has filed lawsuits in American courts challenging government attempts to block phone carriers from purchasing its equipment.
Asian markets started the week with fresh losses as countries reported surging numbers of infections from the coronavirus that has prompted shutdowns of travel and business in many parts of the world.
Japan's benchmark fell nearly 3% and other regional markets were mostly lower. Shares in Australia surged 7% after the government promised more recession-fighting stimulus.
"We want to keep the engine of our economy running through this crisis," Prime Minister Scott Morrison told reporters in Canberra.
The unprecedented $130 billion package includes wage subsidies of up to $1,500 per two weeks to businesses to keep workers on the job.
U.S. futures rebounded, gaining nearly 1%, but oil prices were lower.
Tokyo's Nikkei 225 lost 2.8% to 18,851.04, while the Kospi in South Korea reversed early losses, gaining 0.4% to 1,717.10. The Shanghai Composite shed 0.7% to 2,752.53, while the Hang Seng in Hong Kong lost 0.4% to 23,399.38.
Shares fell in Taiwan and Southeast Asia. India's Sensex fell 2%.
Hopes that a $2 trillion relief bill would ease the economic havoc brought by the pandemic fell flat on Friday, as the major indexes ended lower. The S&P 500 still gained 10.3% last week, its biggest weekly win since 2009. The Dow Jones Industrial Average's 12.8% weekly gain was its biggest since 1938. But the market is still down 25% from the peak it reached a month ago.
The pandemic relief bill approved by the Congress and signed Friday by President Donald Trump includes direct payments to households, aid to hard-hit industries like airlines and support for small businesses. Analysts expect markets to remain turbulent, however, until the outbreak begins to wane.
"Sentiment once again took a turn for the worse going into a week of reckoning by means of economic fundamentals," Jingyi Pan of IG said in a commentary. "The rally seen for Wall Street last week may amount to little more but a relief rally with sentiment turning sour once again going into a fresh week."
The push to deliver financial relief has gained urgency worldwide as the outbreak widens. The number of cases in the U.S. has now surpassed those in China and Italy, climbing to more than 142,000 known cases, according to Johns Hopkins University. The worldwide total has topped 723,000, and the death toll has topped 34,000, while nearly 152,000 have recovered.
For most people, the new coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia, or death.
The damage to corporate profits, the ultimate driver of stock prices, remains uncertain. Very few companies have dared to issue forecasts capturing the damage, though traders are girding for discouraging results in the next few weeks as earnings reporting season begins. Many companies have simply withdrawn their profit forecasts altogether.
At the start of this year, analysts expected S&P 500 companies' earnings would grow 4.4% in the January-March quarter. They now expect earnings will be down 4.1%, according to FactSet.
Earnings for airlines, which have been hit by lost bookings as businesses and individuals canceled travel plans to minimize their risk of contracting the virus, are expected to be catastrophic. Delta went from an expected 2.2% decline to a 108% plunge.
Energy companies have suffered, meanwhile, by a plunge in oil prices partly due to a price war that broke out early this month between Saudi Arabia and Russia. The energy sector of the S&P 500 has lost half its value this year.
U.S. benchmark crude dropped 4.2% or $91 cents on Monday to $20.60 per barrel in electronic trading on the New York Mercantile Exchange. It slid 4.8% to close at $21.51 a barrel on Friday. Goldman Sachs has forecast that it will fall well below $20 a barrel in the next two months because storage will be filled to the brim and wells will have to be shut in.
Brent crude, the international standard, gave up 4.2% or $1.16 to $26.79 per barrel.
The yield on the 10-year Treasury slipped to 0.67% from 0.68% late Friday. Lower yields reflect dimmer expectations for economic growth and greater demand for low-risk assets.
In currency trading, the dollar was at 107.75 Japanese yen, down from 107.94 late Friday. The euro weakened to $1.1078 from $1.1142.
India's central bank on Friday cut its key interest rate by a sizable 75 basis points to 4.4% from 5.15% to ease financing troubles caused by the coronavirus outbreak and help revive the economy.
That's the lowest benchmark rate the Reserve Bank of India has charged on lending to commercial banks, its so-called "repo rate," since March 2010.
The announcement by RBI Governor Shaktikanta Das came a day after India's finance ministry announced a 1.7 trillion ($22 billion) economic stimulus package. The package included delivering grains and lentil rations for three months to 800 million people, some 60% of the world's second-most populous country.
The RBI held a monetary policy committee meeting nearly a week early to cope with the disruptions to the economy due to a three-week lockdown announced by Prime Minister Narendra Modi on Tuesday.
The RBI will also allow banks a 3-month moratorium on payments of installments on loans.