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European shares close lower on soft US data, Nokia falls

European equities closed lower on Thursday following disappointing data from the U.S., where manufacturing growth slowed in January.

The pan-European FTSEurofirst 300 Index provisionally closed lower by 1 percent at 1,333.30 points.

U.S. stocks declined sharply on Thursday, with the Dow extending losses into a third session, after measures of U.S. and Chinese manufacturing disappointed, and as McDonald's and Netflix reported quarterly earnings.

(Read more: China's factory activity shrinks, first time in 6 months)

In Europe, Nokia shares closed down 10.7 percent after the company reported a 22 percent year-on-year fall in sales at its network equipment unit. The earnings are the last the Finnish phone maker will report before handing over its handset unit to software giant Microsoft.

Earlier, French January flash composite PMI data came in at 48.5 for January, up from 47.3 in December. France's CAC 40 closed down 1 around percent.

Germany's private sector meanwhile grew at its fastest pace in more than two-and-a-half years in January, as factory orders flooded in.

Data for Spain gave less reason for optimism: the country's unemployment rate rose slightly to 26.03 percent in the fourth quarter of 2013. This was up from 25.98 percent in the previous quarter.

(Read more: Euro zone business activity rises beyond expectations)

Symbol
Name
Price
 
Change
%Change
Volume
FTSE
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DAX
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CAC 40
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IBEX 35
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Also in Europe, the World Economic Forum in Switzerland continued on Thursday. Business leaders appeared confident that the global economy – and particularly the U.S. – was recovering, but saw risks from income inequality, financial shocks and high unemployment.

The President of the World Bank, Jim Yong Kim, warned that Southern Europe was facing the risk of losing a whole generation to chronic unemployment in an interview with CNBC.

(Read more: Recovery talk ignores jobs crisis: Davos delegates)

Pearson, easyjet slump

Pearson saw its shares close lower by around 8.4 percent after it warned that 2013 earnings would be lower than expected due to higher restructuring costs and poor demand in its education business in North America.

Low cost airline easyJet was another faller on the U.K. FTSE index, provisionally closing down 4.1 percent after warning that the timing of Easter this year will impact its first-half numbers. That will shave off around £25 million ($41 million) of revenue, easyJet said.

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