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Europe shares close lower on US fears

European shares closed sharply lower on Thursday, as U.S. indexes saw their biggest one-day drops since June.


The pan-European FSTEurofirst 300 Index provisionally closed down 1.1 percent at 1,227.14 points, after a thin day of trading, with markets shut all day in Italy, Portugal, Luxembourg, Greece and Austria for Assumption Day. They remained open in France and Germany.

Consumer prices in the U.S. edged up 0.2 percent in July, matching expectations, according to a Labor Department release on Thursday. In addition weekly jobless claims fell 15,000 to a seasonally adjusted 320,000, hitting the lowest level in nearly six years.

The mixed batch of economic reports meant investors were still left trying to gauge when the Federal Reserve might start to reduce its $85 billion in monthly asset purchases.

St. Louis Fed President James Bullard reiterated his comments from Wednesday that the central bank should wait for further evidence that the economy is firming before winding down its asset-purchase program.

"The committee still needs to see more data on macroeconomic performance from the second half of 2013 before making a judgement in this matter," Bullard said in remarks prepared for delivery to a breakfast event hosted by the St. Louis Fed.

In the U.K., retail sales showed a better-than-expected jump in July. The month-on-month figure came in at 1.1 percent, better than estimates of 0.6 percent. The yearly figure climbed to 3 percent, above expectations of a 2.5 percent increase.

This news from the U.K. caused speculation that the Bank of England could raise interest rates sooner-than-expected if the economy continues to show increasing signs of improvement. The FTSE 100 provisionally closed down 1.6 percent.

U.S. stocks stayed sharply in the red on Thursday, with major indexes having their biggest one-day drops since June.


Symbol
Name
Price
 
Change
%Change
Volume
FTSE
---
DAX
---
CAC 40
---
IBEX 35
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In other news, Egypt's capital Cairo remains in a state of urgency after security forces moved in on protest camps set up by supporters of ousted president Mohammed Morsi on Wednesday. At least 525 people have been killed in the ensuing clashes between the army and Morsi supporters, according to the country's health ministry, and thousands injured.

Ophir Energy falls

In stocks news, Africa-focused oil and gas explorer Ophir Energy closed down 14.87 percent, as it announced that future drilling was delayed. Investors were also disappointed that it had still not announced a new partnership deal, for which it raised over $800 million in March.

Shares of insurer Zurich Insurance closed down roughly 3.61 percent after its second-quarter results failed to inspire investor confidence.

Shares of retailer H&M were down by 1.63 percent after the firm reported a fall in like-for-like sales in July.

Healthcare stocks AstraZeneca and GlaxoSmithKline shed 1.74 percent and 1.43 percent respectively, after Morgan Stanley downgraded both stocks.

Imperial Tobacco closed higher by 2.55 percent, after the company's trading update for the nine months to June 30 2013 was not as bad as the market had feared.

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