European stocks closed sharply lower on Thursday, as the fallout from the Volkswagen emissions scandal caused auto stocks to tumble and investors failed to take heart from positive German economic data.
The pan-European STOXX 600 finished the day down around 2.1 percent.
London's FTSE 100 ended roughly 1.2 percent lower, as the bleak outlook on basic resources weighed on the commodity-heavy index.
European markets
The French CAC and German DAX both closed ended around 1.9 percent, with the latter index paring losses slightly before the close.
It failed to gain much of a boost from Germany's closely-watched Ifo index, which showed that business sentiment rose in September. The business climate index came in at 108.5, a slight tick up from August's revised figure of 108.4.
Pressured by declines in global markets, U.S. stocks traded more than 1 percent lower Thursday, as investors awaited a post-close speech from Fed Chair Janet Yellen.
Meanwhile in Europe, the chief executive of the scandal-hit German carmaker Volkswagen quit late on Wednesday. Martin Winterkorn announced his resignation after the company was accused of cheating U.S. emissions tests on its diesel cars.
In a statement issued by the company, Winterkorn said he was "shocked by the events of the past few days." A successor is expected to be determined at VW's supervisory board meeting on Friday.
On Thursday, Volkswagen sharply pared gains from earlier in the session to close down by 3.8 percent, after the German Transport Minister Alexander Dobrindt said that emissions test manipulation by the carmaker took place in both Europe and the U.S.
The STOXX 600 autos sector continued to be hit by the scandal, with the sector being dragged down 3.3 percent. BMW fell over 8.6 percent after a report in magazine Auto Bild claimed that some of its diesel cars were found to exceed emissions standards. It pared losses to finish trade down a little over 5 percent.
France's Peugeot Citroen and Italy's Fiat Chrysler also plunged, closing down 3.7 and 7.5 percent respectively.
Both basic resources and oil and gas that kept investors on their toes Thursday. The price of Brent and WTI crude rose on Thursday, butstocks such as Seadrill and Tullow Oil both closed over 4 percent lower.
Goldman Sachs cut its price target for both BHP Billiton and Glencore, while reiterating its sell rating on other mining stocks. Consequently, mining stocks took a tumble Thursday, with Glencore closing at the bottom of the STOXX 600, down 9.6 percent, while Anglo American ended down over 5 percent.
In individual company news, Thomas Cook Group was one of the top performers in Europe with shares closing up around 2.7 percent after the British travel company reaffirmed its guidance for the year and said winter trading had started positively.
Shares in Monte dei Paschi di Siena soared near the top of the STOXX 600, closing up around 4.4 percent after it said on Wednesday it had reached an agreement with Nomura International to end a complex derivative trade called "Alexandria" that was hitting the Italian bank's profits.
In other market-moving news, Norway's central bank cut its key policy interest rate to 0.75 percent from 1 percent in a surprise move, as it warned that growth prospects for the country have weakened amid falling oil investment.