Europe ends lower as oil price extends declines

The price of oil put pressure on European markets on Tuesday with the commodity continuing to be a main driver of global asset markets.

Oil falls again

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The pan-European Euro Stoxx 600 Index ended 0.6 percent lower at 332 after Brent crude fell by 3 percent to below $52 a barrel.

London's FTSE 100 closed around 0.7 percent lower, the French CAC unofficially ended around 0.5 percent lower, while Germany's DAX was around 0.1 percent higher at market close.

U.S. crude oil fell below $49 to touch a new 5-1/2-year low on Tuesday afternoon, extending losses after a 5-percent plunge in the previous session as worries over a global supply glut intensified.

"Oil's plunge below $50 continues to spark debate among traders about whether or not this is actually a bullish or bearish cue," Marius Paun and Jonathon Sudaria, two dealers at brokerage Capital Spreads, said in a morning note. "At the moment, those who believe it's a sign of slowing global demand and an impending deflationary spiral seem to be winning."

U.S. stocks fell on Tuesday, a day after the market's biggest rout since October, as investors fretted the implications of crude's failure to find a floor.

On the data front in Europe, Markit's final composite Purchasing Managers' Index (PMI) for the euro zone came in at 51.4—lower than the earlier estimate of 51.7.

This is one of the most important forward indicators for the euro zone economy and suggests that the single currency region's economy grew by just 0.1 percent in the final quarter of 2014, according to Chris Williamson, chief economist at survey compiler Markit.

Read MoreEuro zone economy ended 2014 on low note

In the U.K., Markit's PMI index for just the services sector hit a 19-month low and suffered its biggest decline in more than three years.

Meanwhile, markets are closed in Austria, Finland, Poland, Russia, Slovakia, Lebanon, Croatia, Cyprus, Greece and Sweden for the Epiphany holiday.

Ashtead down 7%

In stocks news, U.K.-based equipment rental company Ashtead slumped 7.6 percent. Citing traders, Reuters reported that its stock has been hit by a downgrade for U.S. rival United Rentals on Monday.

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