The pan-European Stoxx 600 provisionally ended down 0.7%, with basic resources sliding 5% to lead losses as most sectors and major bourses ended in negative territory.
In terms of individual share price movement in Europe, Voestalpine shares fell nearly 13% after JPMorgan cut the Austrian steel and technology company's stock from "overweight" to "underweight."
Toward the top of the index, British retailer JD Sports climbed 6% after announcing that annual profit more than doubled for the year.
The lower trade in Europe came as global market sentiment shifts to a more negative setting amid fears over surging inflation and slowing economic growth.
Overnight, shares in the Asia-Pacific region mostly traded lower as economic fears continue to weigh on the market.
Oil futures declined more than 3% by late afternoon in Europe, with international benchmark Brent crude futures slipping 3% to $111.06 per barrel. U.S. crude futures also dropped by 3.6% to around $105.54 per barrel.
Reuters reported that U.S. President Joe Biden plans to call for a suspension of the 18.4-cents a gallon federal tax on gasoline in a bid to bring down soaring energy costs.
U.S. stock index futures rebounded on Wednesday as they attempted to claw back some losses following weeks of selling.
Fed Chair Jerome Powell will appear before Congress on Wednesday, kicking off two days of testimony. Investors will be listening for further clues on the trajectory of interest rate hikes after the central bank hiked rates by three-quarters of a percentage point last week — the Fed's largest rate increase since 1994.
On the data front in Europe, U.K. inflation hit a new 40-year high of 9.1% year-on-year in May as soaring food and energy prices continue to deepen the country's cost-of-living crisis.
— CNBC's Abigal Ng contributed to this market report.