European equities tanked and the euro sank under $1.13 as poor eurozone manufacturing data rekindled fears over the state of the world economy, dealers said.

The pound however pushed higher one day after European Union leaders agreed at a crucial summit to delay Brexit following a request from Prime Minister Theresa May.

The premier was given until April 12 to push her divorce agreement through a fractious parliament next week. If she manages to get it passed, the exit date will be pushed back until May 22.

A third defeat by MPs would mean Britain crashes out on April 12, unless London agrees to take part in European elections.

Prior to the offer, Britain had been due to crash out from the bloc next Friday.

"Sterling remains very volatile as EU leaders have moved to stop a chaotic no-deal Brexit from happening next week by handing Theresa May an extra fortnight," said Oanda analyst Craig Popplewell.

"The UK must decide by April 12 what it will do next," he added.

However, the stronger pound weighed on London's FTSE 100 index, which has a large number of multinationals whose earnings are reported in dollars.

- Alarm bells ring -

Poor manufacturing data meanwhile set alarm bells ringing for investors.

"A series of worse than expected economic releases from Europe have sounded the alarm bell not just for the bloc, but also the global economy, by providing further evidence of a worldwide slowdown in economic activity," said XTB analysts David Cheetham.

Signs of a weak first quarter for the eurozone mounted on Friday as a closely-watched survey pointed to March output being dragged further down by manufacturing weakness, especially in Germany, Europe's largest economy.

Data company IHS Markit said in a first estimate for the month that while services firms proved "resilient", manufacturers in the 19-nation single currency bloc "reported their steepest downturn for six years" as pressure mounted from trade wars and Brexit fears.

At 47.6 points -- down from 49.3 last month -- the manufacturing purchasing managers' index (PMI) sank further below the crucial 50-point threshold between expansion and contraction.

In Germany, "factory orders deteriorated to the greatest extent since the height of the global financial crisis in April 2009," IHS Markit said.

"Due to the country's large level of exports, German manufacturing is often seen as a bellwether of global economic activity," added Cheetham.

"It's sending a clear and obvious warning sign on the health of the global economy."