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Europe sinks at the close; China concerns linger

European equities ended in the red on Wednesday as investors failed to shake off concerns over the economic slowdown in China.

The pan-European STOXX 600 finished 0.65 percent lower, as most sectors closed in negative territory.

Weighed down by house-builders, London's FTSE 100 index slipped 1.15 percent, while the German DAX closed off 1.2 percent lower.

The French CAC finished traded down 0.7 percent, after data revealed consumer prices had fallen 0.4 percent in September.

Read MoreUK unemployment falls to lowest since 2008

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Overnight, Asia stocks closed mostly in the red, after data showed consumer inflation in China had cooled more than expected in the last month, adding extra pressure on investors concerned about the health of the world's second-biggest economy.

China's consumer price index (CPI) rose 1.6 percent in September from a year earlier, against forecasts of a 1.8 percent rise from a Reuters poll. U.S. stocks failed to stay positive, as investors continued to digest soft data and mixed earnings.

China puts stocks under the microscope

In individual stock news, concerns over the health of the Chinese economy placed many sectors exposed to the market under pressure.

Danish jewelry maker Pandora was one of the worst performers with shares ending down almost 6 percent after analyst firm Carnegie downgraded third-quarter U.S. sales estimates for the firm. Other luxury brands including Christian Dior and LVMH both ended lower, due to the importance of the Chinese market for sales.

Other sectors also felt the fallout from China and weaker commodity prices. Oil prices seesawed throughout trade, as the prospect that a supply glut could ease in coming months weighed against the concern surrounding China and demand.

Brent crude slipped, trading at $49.04 a barrel while U.S. crude was at $46.30 at the close. The oil and gas sector was mixed as oil prices fluctuated, with Seadrill, and Tullow Oil outperforming, both closing up at 2.7 and 3.2 percent, respectively.

Mining stocks recovered after Mexican precious metals miner Fresnillo said it was on track to hit its silver and gold production targets for 2015. It also added that it was willing to cut capital expenditure further in response to gold and silver prices. This sent the price of gold higher and helped the basic resources sector. Fresnillo shares finished up 2.2 percent, while Glencore jumped 1.6 percent.

Elsewhere, Dutch semiconductor-equipment maker ASML said on Wednesday that it remains on track for sales in 2015 and warned that clients were "slightly more cautious" with investment. This comes after Intel warned on slower corporate spending. ASML shares sank, down 4.4 percent. The news dragged other chipmakers Dialog Semiconductor and STMicro into the red.

Swedish builder Skanska saw shares tank 8.9 percent, its worst day since August 2011, after it said U.S. writedowns would hit Q3 profits.

In the green, German energy firm E.ON saw shares close up 3.3 percent after it agreed to sell its Norwegian oil and gas assets to Russian billionaire Mikhail Fridman, in a deal worth $1.6 billion.

U.K. fund manager Hargreaves Lansdown was a top performer on the STOXX 600, up 3.7 percent after news business inflows hit a record high.