On Tuesday, European shares fell again, extending their slide for a third session, with investors fretting about a weak economic outlook and rising energy prices.
Moreover, euro zone data also showed that there was a contraction in the business activity in the region in August.
The continent-wide STOXX 600 fell 0.4%, which brought it down to its lowest in nearly a month.
Euro zone data
August saw business activity in the euro zone decline for the second consecutive month, as consumers were forced to reduce spending due to a cost of living crisis.
A survey showed that supply constraints also took a toll on manufacturers.
The downturn in Germany only deepened in August, with companies recording low demand because of economic uncertainty, rising interest rates, and high inflation.
In other data, there was a rise in the manufacturing index in August from 49.3 in July to 49.8. This beat forecasts of analysts of 48.2.
After the data, there was a 0.3% decline recorded in the German DAX index. Analysts said that the day was not good for the European markets because of poor data.
This is because the latest flash manufacturing PMI numbers dropped into contraction territory for France, Germany as well as the United Kingdom.
Analysts did note that even though the economic data had been poor, the market reaction was a bit more ambivalent.
There was a rise in banks of 0.3% and 1.1% in autos, while a 3.5% rise was recorded in energy-led gains because there was a gain in crude prices globally due to tight supply concerns.
There was a more than 13% rise in benchmark gas prices overnight in the European Union as they hit a record peak after they had already doubled in a month.
This saw them rise 14 times higher than the average recorded in the previous decade. Russia will cut European gas supplies for three days at the end of the month via the Nord Stream 1 pipeline.
When it comes to European markets, investors are concerned about the uncertainty because the energy crisis could worsen for the continent.
The markets are also expected to remain nervous just ahead of the annual meeting of global central bankers in Jackson Hole, Wyoming.
The Fed Chair Jerome Powell is scheduled to speak at the conference, which means investors will be scouring for hints about the future interest rate path of the US central bank in the world’s largest economy.
As far as stocks are concerned, there was a 4.0% rise in Uniper SE, after the German utility said that it would start producing electricity at its coal-fired power plant.
This is because there may be disruptions in the gas supply because of the three-day shutdown of Russian gas supplies at the end of the month.
The euro was also weighed down because of energy concerns, which saw it go below parity and it is expected to remain under pressure due to the crisis.