Europe Shares Close Down After Commodities Sell-Off

European shares closed lower on Monday, after news of an unexpected slowdown in China sparked a commodities sell-off.


The pan-European FTSEurofirst 300 Index closed provisionally down 0.7 percent at 1,174.23 points. Mining stocks posted the biggest declines after disappointing Chinese gross domestic product (GDP) data led to concerns about the outlook for the world's second largest economy. The STOXX Europe 600 Basic Resources dropped 4.9 percent, its biggest 1-day fall since November 2011.

China's economy grew an annual 7.7 percent in the first quarter, below the expected 8 percent level and down from 7.9 percent in the previous quarter.

Randgold Resources, Lonmin, Rio Tinto, Fresnillo and Kazakmys all posted heavy declines. More downward pressure came when gold slumped to a 2-year low and retrenched further into a technical bear market.

(Read More: Miners Crushed as Gold Extends Fall Below $1,500)

Investors also eyed events in Cyprus, where the government commenced a two-day meeting to discuss an urgent growth plan. Euro zone finance ministers have agreed to a 10 billion euro bailout for Cyprus, with Nicosia expected to foot up to 6 billion euros more through tax rises, spending cuts and a tax on depositors in two of the country's largest banks.

(Read More: Cyprus Offers Easier Citizenship to Foreign Depositors)

In stocks news, U.K. bookmaker Ladbrokes released a warning that operating profit is likely to be at the bottom of its range; shares closed around 8 percent lower.

Retailer H&M announced a 12 percent year-on-year dip in March sales on Monday due to the cold weather; shares closed 0.73 percent down.

U.S. investment firm Royalty Pharma raised its cash offer for Elan to $12 per share, upping its efforts to take control of the Irish drugmaker.

Reuters reported on Monday that the French government is considering trimming its stakes in utilities EDF and GDF Suez to raise as much as 4.2 billion euros ($5.5 billion), citing an unnamed government source.