Europe ends sharply lower despite oil bounce; autos sink

European markets finished sharply lower on Thursday, as corporate earnings weighed on sentiment and investors struggled to find solace in the oil price pick up.

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The pan-European STOXX 600 came off session lows yet closed down 1.5 percent provisionally, despite a strong performance in U.S. markets and a rally in the oil price. London's FTSE was off 0.7 percent helped by a rally in mining stocks, while its European counterparts, the French CAC and German DAX, slipped to finish 1.8 and 1.7 percent lower respectively.

Doom and gloom for autos

The autos sector was a major underperformer on Thursday. Shares of French carmaker Renault tumbled as much as 19 percent before closing 10.3 percent down, after confirming its offices were searched last week regarding a fraud investigation.

Meanwhile, shares in Italian auto maker Fiat Chrysler (FCA) fell almost 8 percent by the close, after the owner of two Chicago-area dealerships filed a lawsuit accusing the company of inflating sales, adding to the legal woes hitting the sector.

Both reports had a knock-on impact on other autos stocks, including Peugeot Citroen, down 5 percent, while Volkswagen and Daimler were both off more than 3.5 percent.

Burberry eyes recovery

In earnings news, Britain's biggest supermarket chain Tesco said group like-for-like sales in the six weeks ending January 9, the key Christmas period, were up 2.1 percent, sending shares up over 6 percent.

Switzerland's Richemont—the owner of brands including Cartier and Piaget—said sales in the three months to December fell 4 percent due to weakness in Europe. Shares in the company fell more than 1 percent.

Britain's Burberry reported underlying retail revenue rose 1 percent to £603 million in the three months to December 31 in a "tougher environment than expected". Shares closed higher.

Read MoreECB divided on size of deposit rate cut in December

Staying in retail, ASOS reported total retail sales were up 22 percent in the four months to December 31, helped by "record sales" over cyber weekend in November, yet shares slipped over 1.5 percent.

Jakarta explosions; BoE, ECB minutes

Explosions and gunfire in central Jakarta sent Indonesia's stocks tumbling. Reports said at least six explosions were heard which, according to Indonesian police, the the attacks killing at least seven police officers and civilians.

Media reports said there may have been at least three suicide bombers involved in the explosions. Jakarta's chief of police said the attacks were "definitely" the work of Islamic State, Reuters reported.

Elsewhere, the Bank of England's policy makers voted 8-1 to maintain its key U.K. interest rate at 0.5 percent, while minutes released on Thursday from the European Central Bank (ECB) showed some policymakers wanted a bigger interest rate cut on its deposit facility in December.

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