European equities extended a two-week sell-off to close lower on Thursday, as investors booked profits on heightened fears that the U.S. Federal Reserve could act soon start to unwind its bond-buying program.
The pan-European FTSEurofirst 300 index closed provisionally down 0.9 percent at 1,244.80 points. The FTSE 100 closed unofficially 1.0 percent lower, while the French Cac 40 and German Dax closed down around 0.4 percent and 0.7 percent respectively.
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Back in Europe, the European Union moved one step closer to the creation of a single banking union. Following a 16-hour negotiating session in Brussels, lawmakers agreed on the basis of a deal to wind down failing banks and ensure major depositors in failing banks are tapped first.
If approved by finance ministers and leaders, the measure would make Cyprus-style losses for senior bondholders and large investors a permanent feature of the bloc's response to banking crises.
Optimism for 2014
Despite this week's losses, a Reuters poll of over 50 strategists forecast European stocks would extend their strong rally into 2014, driven by optimism about the economic recovery and the prospect of a long period of accommodative monetary policy.
The poll predicted the pan-European STOXX Europe 600 would end 2014 12 percent higher, with the DAX surging 10 percent to an historic high.