European shares closed lower on Wednesday, as riskier assets were shunned by investors on concerns about a possible military strike on Syria.
The pan-European FTSEurofirst 300 Index closed lower for a second day running, provisionally down 0.3 percent at 1,199.05 points. The major country gainer was Italy's FTSE MIB, which was propped up by bank stocks after Banco Popolare reported strong first-half results. The FTSE MIB closed provisionally up 1.0 percent.
(Read More: Syria rattles markets for second day)
Elsewhere, sentiment in Europe was curbed by growing worries about military intervention in Syria, which has sparked heavy selling in stocks. Brent crude oil spiked to a six-month high and hovered around the $115 mark on Wednesday. Gold — often seen as a safe haven — climbed to $1,433 on Wednesday before falling back slightly.
(Read More: Oil prices seen higher but shock not yet in the cards)
The U.S. could hit Syria with missile strikes as early as Thursday, senior U.S. officials told NBC news. President Barack Obama and his officials have conducted a flurry of international consultations with foreign leaders on how to respond to a possible chemical weapons attack by Syria on its own citizens.
However, U.S. stocks edged higher on Wednesday, following two days of steep losses, despite a weaker-than-expected pending home sales report and Syriaworries.
Japan's benchmark stock index fell more than two percent to a two-month low. A safety bid briefly pushed the yen to its highest level against the dollar in more than two weeks. A rout in emerging markets also continued, with shares in Indonesia, the Philippines and Thailand officially moving into bear market territory on Tuesday.
(Read More: Syria casts 'big black cloud' on emerging markets)
In Europe, German Chancellor Angela Merkel caused a stir on Tuesday when she said Greece should never have been allowed into the euro. The German leader's outburst at an election rally on Tuesday evening came as she attempted to prove to voters she maintains a tough stance on struggling euro countries, a month before German elections.
(Read More: Greece should neverhave been allowed to join euro: Merkel)
In other news, Bank of England's Governor Mark Carney said the central bank would consider injecting further stimulus if rising bond yields threatened the country's recovery. He also stressed that he did not expect a quick fall in the rate of unemployment to 7 percent - the level at which the central bank has said it would consider raising interest rates.
Travel & leisure hit by Syria
Travel and leisure stocks fell 1.6 percent, led by airlines such as Lufthansa, which fell 3.09 percent. The threat of the Syrian conflict spreading throughout the Middle East hit tour operators which sell holidays in the region.
Cautious guidance from Europe's largest hotel operator, Accor, which fell 4.2 percent, also weighed on the sector. The French hotel group reported a tough climate in its first-half results and said it was cautious about its 2013 profit growth.
Shares of U.K.-based security firm G4S traded up 3.05 percent after it announced it would be issuing new shares and selling businesses to strengthen its balance sheet.
Shares of Gold producer Polymetal fell by 6.7 percent after announcing write-offs that pushed the firm into a first-half loss.
Shares of the French building, telecommunications and television company Bouygues rose by 8.05 percent after reporting solid results, despite lowering its sales forecast for the year.
The jump in crude prices boosted heavyweight oil and gas stocks, which rose 2.3 percent, and helped minimize wider index losses.
Follow us on Twitter: @CNBCWorld
