European stocks close: stocks closed lower on concerns over the global slowdown

Stock indices closed lower as a selloff on markets around the world continued. The Japanese Nikkei stock index fell almost 4%, while China's Shanghai Composite declined more than 8%.

Concerns over a slowdown in the Chinese economy weighed on markets.

China allowed pension funds to invest in domestic stocks. Pension funds are now able to invest up to 30% of their net assets in domestic stocks.

China hopes with this decision to boost the liquidity on the stock market and to stop a massive selloff.

According to the newspaper the Financial News, the People's Bank of China (PBoC) plans to use a mix of innovative monetary policy tools to inject liquidity into the financial system. The central bank wants to make "flexible use" of the new tools.

The new tools should replace foreign-exchange purchases.

The Confederation of British Industry (CBI) released its economic growth forecasts for the U.K. The CBI expects Britain's economy to expand 2.6% this year, up from the previous estimate of 2.4%, and 2.8% in 2016, up from the previous estimate of 2.5%.

The upgrade was driven by higher increase in in productivity and household spending.

Indexes on the close:

Name Price Change Change %

FTSE 100 5,898.87 -288.78 -4.67 %

DAX 9,648.43 -476.09 -4.70 %

CAC 40 4,383.46 -247.53 -5.35 %