European shares largely closed in the red on Wednesday after weak manufacturing data fueled concerns about a global economic slowdown.
The Stoxx 600 was down 0.13 percent at the end of the first trading session of 2019, despite the DAX and the FTSE closing in the green. The CAC, however, ended the session 0.9 percent lower.
Most sectors were in the red at the end of the session, with basic resources shedding the most value and closing down 1.8 percent.
Global miners were weak amid lower copper prices and concerns over economic growth in leading metals consumer China. Mining giant Antofagasta was down 1.6 percent, while BHP Group's shares fell by 1.2 percent. Many U.K. manufacturers are reportedly stockpiling materials ahead of Britain's departure from the EU in March.
Data showing the first slowdown in Chinese factory activity in 19 months sent shares lower in Europe, with those most exposed to the Asian market feeling some impact. HSBC shares were trading down slightly lower, while Standard Chartered lost half a percent.
In other news, euro zone data also disappointed, with IHS Markit's December final manufacturing PMI reading coming in at 51.4, down from 51.8 in the previous month and the lowest reading since February 2016. However, manufacturing output PMI came in at 51, higher than November's 50.7.
Sterling, meanwhile, slumped more than 1 percent, to hit $1.2592 as recent data showed that British industries were ramping up their stockpiling in December amid growing uncertainty surrounding Brexit.
Stateside, stocks slid on the back of the weak data from Asia and Europe. Both the S&P 500 and the Dow Jones Industrial Average were in the red, although the Nasdaq saw a rise of 0.2 percent. The U.S. government shutdown continues to add to political uncertainty, as the dispute between Democrats and President Donald Trump over the funding of a wall at the Mexican border reached an impasse.
Meanwhile China and the U.S. are trying to resolve trade tensions over a 90-day truce period, with President Donald Trump saying last week that he and Chinese President Xi Jinping "had a long and very good call" covering "all subjects, areas and points of dispute."
Gold and the Japanese yen were the beneficiaries of the volatility and geopolitical uncertainty as traders flocked to safe-haven investments. Gold topped six-month highs, while the yen reached a seven-month peak.
Wednesday also saw the Frankfurt prosecutor drop a probe against former Deutsche Boerse CEO Carsten Kengeter, who was being investigated for insider trading.
Italian lender in trouble
The European Central Bank appointed temporary administrators on Wednesday to take charge of troubled Italian lender Banca Carige, after several of the bank's board members resigned. Trading in Banca Carige's shares were suspended by Italy's market watchdog early Wednesday morning.
Shares of other Italian lenders fell, with Banco BPM off by 1.6 percent and UBI Banca down 1.9 percent.
In corporate news, Deutsche Telekom has reportedly filed a lawsuit against the German government over a 5G auction. German newspaper Die Welt reported Tuesday that the telecommunications giant's lawsuit contested a set of preconditions for participating in the auction, which would require bidders to invest to expand the country's mobile network and potentially allow new entrants to use their infrastructure.
Elsewhere, traders are looking ahead to an upcoming joint discussion between Federal Reserve Chairman Jerome Powell and former Fed chiefs Janet Yellen and Ben Benanke later this week. The Fed hiked interest rates four times in 2018, but expectations for further increases this year have soured amid concerns around waning economic growth.