European equities lower, oil drops 3% on China weakness; Data from euro zone weighs

European equities declined and crude oil dropped over 3% on Tuesday after official data showed China's giant manufacturing sector, the engine powering the world's biggest energy consumer, contracted at the fastest pace in three years.

China’s official manufacturing gauge released Tuesday showed activity in August slipped to a three-year low. The purchasing managers index fell to 49.7 from 50 in July, below market forecasts of 49.8 and its lowest level since August 2012. Readings below 50 indicate contraction. Separately, the Caixin China manufacturing PMI fell to 47.3 in August from 47.8 in July, its lowest point in more than six years.

The weak data fueled concerns over a worsening slowdown in the world’s second-largest economy.

The figures helped spur a retreat in oil prices after three days of hefty gains. Investors took profits after Brent and U.S. crude both soared more than 8 percent on Monday, traders said.

Benchmark Brent crude dropped $2.13 to a low of $52.02 a barrel, and was trading around $52.15 by 0815 GMT.

U.S. crude was down $2.00 at $47.20 a barrel. It settled up $3.98, or 8.8 percent, in the previous session.

In the stock market, the Stoxx Europe 600 dropped 2.5% to 353.48, with no sectors rising. Stocks are making efforts to begin September positively, after a poor performance in August. The pan-European benchmark ended August with a monthly fall of 8.5%, the biggest drop for the month since 2011.

China is a key market for mining companies and luxury-goods makers. Shares of metal producer Anglo American PLC dropped 4.7%, and Rio Tinto PLC gave up 3.5%. Meanwhile, Britain’s Burberry Group PLC lost 4%, and France’s Christian Dior SE dropped 3.2%.

European stocks fell further after the release of August factory-activity data for the region. The purchasing managers’ index for manufacturing in the eurozone slipped to 52.3, skimming just below the 52.4 FactSet consensus estimate.

German manufacturing activity hit a 16-month high, but French and Italian activity each reached four-month lows.

The FTSE 100 was lower 2.4% at 6,100.08, while France’s CAC 40 index  fell 1.9% to 4,566.00.

Germany’s DAX 30 index fell 2.7% to 9,983.26, and Spain’s IBEX 35  lost 2.5% to 10,000.10.