European equities closed sharply lower on Wednesday as the turmoil in global commodity markets continued. The pan-European FTSEurofirst 300 (FTSE International: .FTEU3) provisionally ended 1.5 percent lower at 1,355.22 points, with the basic resources (STOXX:.SXPP) sector sliding as much as 6 percent and the energy sector (STOXX:.SXEP) closing down 2.7 percent.

London’s FTSE 100 (FTSE International: .FTSE) underperformed other European benchmarks, provisionally closing 2.3 percent lower as miners dragged. The German DAX (^GDAXI)and French CAC (Euronext Paris: .FCHI) ended 1.2 percent lower and 1.6 percent lower respectively. Falling oil prices continue to weigh on global equity markets. On Tuesday, the commodity hit a near six-year low, extending losses after trading lower for seven straight weeks. Meanwhile, copper prices (CEC:Commodities Exchange Centre: @HG.1) also hit an five-year-plus low as investment in commodities falls. Copper mining companies saw heavy selling on Wednesday with Antofagasta (London Stock Exchange: ANTO-GB), Glencore (London Stock Exchange: GLEN-GB) and Boliden (Stockholmsborsen:BOL-SE) all down by over 8 percent. Glencore (London Stock Exchange: GLEN-GB) hit a a record low in early afternoon trade, with its stock down by as much as 12 percent, before paring gains to close around 9 percent lower.

“An overnight slump in copper prices has spurred fears that it is a lack of demand-the bad kind of deflation that has the potential to spiral downwards,” Marius Paun and Jonathan Sudaria, two dealers at Capital Spreads, said in a morning note.

U.S. stocks fell sharply on Wednesday, continuing losses into a fourth day, as a thrashing of commodities and disappointing retail sales increased worry that the global economy is slowing.JPMorgan Chase dropped in early New York trading after reporting a decline in fourth-quarter profit; Wells Fargo also fell after it posted results in line with expectations.

The European Court of Justice on Wednesday said that the Outright Monetary Transactions (OMT) bond-buying program-commonly seen as a predecessor to QE-was compatible with treaty provisions and was in line with European Union law, as long as certain conditions were met. The ruling from the court is a non-binding judgment but has added weight to the possibility of more stimulus in the euro zone. It comes ahead of the ECB’s next policy meeting on January 22, when a number of analysts expect it to announce a full-scale QE program in an effort to bolster the region’s struggling economy. In other news, the World Bank on Tuesday lowered its global growth forecasts for 2015 and 2016 due to disappointing economic prospects in the euro zone, Japan and some major emerging economies that offset the benefit of lower oil prices. On the data front, euro zone industrial production data showed a rise for the third straight month in November. Meanwhile, Burberry (London Stock Exchange: BRBY-GB) shares closed around 1.3 percent higher after trading statement highlighted a rise in third-quarter sales.Tesco (London Stock Exchange: TSCO-GB) shares closed around 0.9 percent higher following an upgrade by BNP Paribas. Follow us on Twitter: @CNBCWorld