While the Fed's 50 basis points cut on Tuesday did see markets increasing bets on similar moves from other central banks, the fact that it was the Fed's first rate cut outside of a regularly scheduled policymaker meeting since the 2008 crisis led to heightened concerns over the outbreak.

The pan-European STOXX 600 index rose 1.4%, with the utilities <.SX6p> and telecom sectors leading gains.

Danish wind farm developer Orsted A/S surged more than 5%, leading utilities higher after it upped its annual core earnings forecast.

"Overall investors seem pretty pleased with the stimulus situation," said Connor Campbell, analyst at financial spread better Spreadex.

"Still, somewhat cautious because there is still so much uncertainty over how much central banks over the world have to work with, and how much these rate cuts will help."

Money markets in the euro zone are pricing a 90% chance that the ECB will cut its deposit rate, now minus 0.50%, by 10 basis points next week.

However, sources told Reuters that policy action was not on the agenda of an unscheduled telephone conference call held by ECB policymakers late on Tuesday to discuss their emergency response to the coronavirus outbreak.

Adding to concerns over the virus outbreak, International Monetary Fund Managing Director Kristalina Georgieva said on Wednesday that the faster spread of the coronavirus will wipe out any hope of stronger global growth in 2020.

Healthcare stocks jumped, with Roche Holding AG gaining more than 3% after Chinese health authorities said it would use the Swiss pharma giant's arthritis drug to treat some coronavirus patients in severe conditions.

Italian stocks closed 0.9% higher as the country prepared drastic new emergency measures to try and slow the spread of coronavirus in Europe's worst hit country.

German online food delivery company Hellofresh jumped 10.7%, topping the STOXX 600 as it extended gains following strong annual results.

The travel and leisure index ended 1.6% lower as major hotel and airline stocks continued to be battered by virus-related disruptions hurting demand.

Aviation support services provider Signature Aviation Plc sank 6.1% to the bottom of the STOXX 600 after Barclays and JP Morgan cut the stock's target price.

By Ambar Warrick and Sruthi Shankar