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Europe finishes sharply lower; commodities weigh; DAX down 2.5%

European equities finished sharply lower on Tuesday, as volatility in commodity markets weighed on sentiment and investors digested the latest raft of data from the euro zone.

Weak German data

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The pan-European STOXX 600 closed 1.8 percent lower provisionally, with all sectors deep in negative territory.

Germany's DAX finished down 2.5 percent on the back of disappointing data. The new figures showed industrial orders in the euro zone's largest economy fell in February as foreign demand weakened, Reuters reported.

Meanwhile, final PMI figures for the euro zone came in below flash estimates. In the U.K., services PMI data came in at 53.7 for March, up from 52.7 in February, in line with Reuters forecasts.

The bad mood spread to the U.S. which opened sharply lower and then begun to recover lost ground. At Europe's close, the major U.S. benchmarks were still in negative territory.

Commodities weigh

Oil remained a key focus for investors on Tuesday, as concerns of a global oil supply glut continue to brew.

Prices have been under pressure this week as investors are starting to doubt whether there will be an agreementover a coordinated freezebetween top oil producers at a meeting in Doha, set to take place on April 17.

Energy firms finished sharply lower, including Statoil and Royal Dutch Shell. BP closed off around 2 percent, following news that a U.S. district judge has approved BP's civil settlement over the Gulf of Mexico oil spill in 2010. The oil major will pay up around $20 billion in penalties to five states and the U.S. government.

Some metal prices also took a tumble on Tuesday, causing basic resources to be one of Europe's worst performer, off over 3.5 percent as a sector. Anglo American, ArcelorMittal and Glencore all finished near the bottom of European benchmarks.

"Once again natural resources are very much driving the agenda – WTI crude may have rebounded just above the $35 a barrel level, but base metals miners are still reeling from yesterday's sell-off in commodity prices," Tony Cross, a market analyst at Trustnet Direct, said in an afternoon note.

Peugeot slips; banks eyed

French carmaker, Peugeot Citroen saw shares tumble more than 6.5 percent. This comes after the automaker's CEO outlined plans for a "global product and technology offensive" in a bid to boost sales growth, with the firm pledging a new vehicle every year for each of its brands.

AccorHotels acquired luxury home rental firm, OneFineStay for 148 million euros ($168.1 million), hoping to fend off competition from the likes of Airbnb. Despite the news, shares were off some 1 percent by the end of the session.

Banks were also in focus on Tuesday, with the sector closing over 3 percent down. Credit Suisse and HSBC both rejected suggestions that they were actively involved in using offshore structures to help clients cheat on their taxes, Reuters reported on Tuesday, following the "Panama papers" leak over the weekend, which is currently shaking up the political world.

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