Markets remained nervous about the situation in Europe on Wednesday. The euro fell 1.1 percent against the US currency to $1.2368 while Spain’s 10-year yield rose 21 basis points to 6.66 percent. The MSCI All-Country World Index fell 1.8 percent.
Italy's 10-year yield jumped 17 basis points to 5.93 percent after a government debt sale fell short of its maximum target.
Worries over Europe's economy was also reflected in the European Commission's economic sentiment indicator for the euro area, which fell 2.3 points to 90.6 in May.
Elsewhere in Europe, hopes for a recovery in the property market in the UK increased after Bank of England data on Wednesday showed that mortgage approvals rose in April to their highest since January.
However, hopes for a recovery in the US housing market were set back after data on Wednesday showed that pending home sales fell 5.5 percent in April.
Amid worries over Europe and the global economy, monetary policies around the world have become easier of late. Brazil's central bank continued that trend on Wednesday, lowering the Selic rate by a half-point to 8.5 percent.