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Europe shares close lower on Ukraine tensions

European stocks closed lower on Thursday following heightened tensions in Ukraine, as shares in state-backed Royal Bank of Scotland dropped 8 percent on worse-than-expected results.

Russian jets patrol border

The FTSEurofirst 300 Index provisionally closed down around 0.2 percent on Thursday, following a negative close on Wednesday. Upbeat data on U.S. manufacturing goods' orders however helped the FTSE 100 pare losses and end the day higher by 0.1 percent.

Heightening tensions in Ukraine are seen as the key driver of the broad move lower in European stock markets, with the focus now turning to Crimea, a peninsula in the south of the country home to an ethnic Russian majority. Armed men seized the parliament in Crimea on Thursday and raised the Russian flag, according to NBC News.

It came after Russia's President Vladimir Putin on Wednesday dispatched army troops to Ukraine's borders for a military exercise -- days after the fall of former president Viktor Yanukovych.

German bund futures rose shortly after the news and stocks fell lower. The U.S. has warned any military intervention would be a "grave mistake". Russian stocks lost over 2 percent after the reports.

(Read More: Russian jets patrol Ukraine border, markets pull back)

Across the pond, U.S. stocks climbed on Thursday, with the S&P 500 rising above its record close, as investors considered reports on jobless claims and durable goods, while listening to Federal Reserve Chair Janet Yellen.

(Read more: Yellen says coldweather may have impacted economy)

Yellen said that harsh winter weather may have had an impact on recent economic data and reiterated her stance that accommodative monetary policy should remain appropriate for some time.

"Since my appearance before the House committee, a number of data releases have pointed to softer spending than many analysts had expected," Yellen told the Senate Banking Committee. "Part of that softness may reflect adverse weather conditions, but at this point it is difficult to discern how much."

Back in Europe, a euro zone economic sentiment index saw a rise to 101.2 points in February, the European Commission reported on Thursday. This compared to a figure of 101.0 for January and was better than analysts' expectations of 100.9.

Meanwhile, in Germany, unemployment figures showed a drop in February to its lowest level in nearly 18 months. Data from the Labor Office showed the unemployment total decreased by 14,000 to 2.914 million this month.

German Chancellor Angela Merkel warned U.K. lawmakers Thursday that their wish for a fundamental overhaul of the way Europe is run was unlikely to be satisfied. However, in her speech to both houses of the U.K. Parliament, the Chancellor added that the European Union needed to reform its political shape to keep up with the times and emerge stronger from the financial crisis.

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FTSE
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DAX
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CAC 40
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IBEX 35
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RBS shares sink

In corporate releases, shares of U.K. lender Royal Bank of Scotland closed down close to 8 percent after reporting 2013 profit that failed to meet market expectations on Thursday, as the bank continued to detail its restructuring plans, including the divestment of assets.

(Read More: RBS pre-tax loss widens as major overhaul signaled)

The world's biggest advertising firm, WPP, saw its shares close down roughly 3.4 percent after issuing lower margin guidance for the year despite reporting record profit margins and strong results for 2013.

(Read More: WPP CEO: Facebook's huge WhatsApp acquisition 'potty')

Shares of German insurer Allianz tipped 2.3 percent lower at close after posting 2013 results that were "broadly in line". Analysts cited a high net outflow of asset management being the reason behind the move lower.

(Read More: Allianz shareholders urge action on Pimco arm)

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