The German DAX index ended unofficially down 1 percent, despite better-than-expected widely business sentiment data from Ifo.
Germany's closely watched Ifo index rose to 107.9 in March from 106.8 in February. Analysts polled by Reuters had expected a March reading of 107.3.
The reading helped push the euro back towards $1.10.
However, the German data was overshadowed by the downward trend on Wall Street, where investors continued to ponder the timing of a U.S. Federal Reserve rate hike, as well as the impact of the strong U.S. dollar on earnings.
Oil markets were also in focus, with Brent crude prices volatile after data on Wednesday showed U.S. inventories jumped to their highest in at least 80 years last week.
Elsewhere, Greece risks running out of cash by April 20 unless it secures fresh aid, a source familiar with the matter told Reuters on Tuesday. The leaves the country's hard-left leaders little time to convince skeptical creditors they are committed to economic reforms.