European equities ended sharply in negative territory after investors tried to get to grips with the volatility surrounding oil prices and mining stocks.
The pan- European Stoxx 600 index closed provisionally 1.8 percent lower on Tuesday, with all major bourses closing well over 1 percent down. The worst performing sector was basic resources, which tanked over 6.5 percent.
Miners drag on London's FTSE
London-listed miners were the worst hit on the FTSE index amid the oil price rout and drop in other commodities. Anglo American extended losses to close 12.3 percent lower after suspending its dividend and announcing cuts to capital expenditure. It also announced that it was to reduce its workforce from 162,000 to around 50,000.
Fellow miner, BHP Billiton also closed sharply lower, off 5.5 percent on news that BHP and Vale, the owners of a Brazilian iron ore mine where a dam burst in November, killing 13 people and destroying a village, were being sued for over $5 billion in environmental and property damages.
Rio Tinto finished over 8 percent lower after it said on Tuesday that it expected its 2016 capital spending budget to fall by about $500 million to $5 billion, Reuters reported. In addition, Glencore was off 6.9 percent.
Brent hovering around $40
On France's CAC index, the best performer was Bouygues, which was as high as 4 percent during trade before paring gains, closing up 1.2 percent. Telecoms operator Orange reversed early gains, to close down around 0.6 percent, following a Bloomberg report saying Orange was in talks to buy media and telecom assets from Bouygues. Orange however dismissed the report.
Commodities were also in focus for Asian markets overnight after oil prices fell more than 5 percent late on Monday. Oil prices suffered a sharp decline during Monday and Tuesday trading as a result of a global supply glut. OPEC failed to reach an agreement to reduce production levels when it met on Friday.
While oil bounced in early trade, prices sank sharply throughout Tuesday's session, as global glut concerns intensified. Brent futures recovered most of its losses by Europe's close, last stood at $40.78 a barrel, while U.S. crude was at $37.84. Brent briefly dipped below $40—first time since early 2009—while WTI slipped below $37 before the U.S. open.
Asian equities closed firmly in the red on Tuesday on the back of the lower oil price. Chinese markets traded in the red as November trade data remained weak. Exports fell by 6.8 percent on-year in their fifth month of contraction, marking another month of declines, while imports were down 8.7 percent on-year. U.S. stocks traded sharply lower as oil and China data weighed.
In other news, EU antitrust regulators have dropped Shell, BP, and Statoil from an investigation into suspected rigging of ethanol benchmarks, focusing instead on three producers of the biofuel, Reuters reported.