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Europe closes lower on disappointing GDP data

European shares closed lower on Thursday, as GDP data disappointed and investors mulled the possibility of the European Central Bank (ECB) announcing monetary stimulus in the next few weeks.

Euro zone growth had missed expectations, with Italy and Portugal both reporting contractions, according to data released by Eurostat.

Read MoreEuro zone growth falls short of expectations

European stocks were also pushed lower by a weaker start to trade on Wall Street. Markets there extended the previous session's losses, after disappointing earnings from a handful of retailers such as Wal-Mart and its rival Kohl's.

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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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ECB action eyed

The pan-European FTSEurofirst 300 index closed provisionally lower by 0.9 percent at 1,356.67 points.

The lackluster growth data came as anxiety has spread across global markets, with concerns centered around deflation in Europe, hefty stocks valuations and ongoing tensions in Ukraine.

In an ECB survey, professional forecasters cut their outlook for inflation in the euro zone on Thursday morning, boosting fears the region was heading for stagnation.

The euro fell to a 11-week low after the survey and stocks retreated, as investors put money into fixed income, seen as a safer investment option.

Read MoreTepper on the market: 'I think it's nervous time'

However, expectations are growing that the ECB could take act against deflation at its next Governing Council meeting in June.

ECB Vice President Vitor Constancio said on Thursday that the central bank was ready to act if needed, but said there were no distinct signs of deflation in the euro bloc.

Among the policy tools available to the bank are a further cut to interest rates, a negative deposit rate or even a Federal Reserve-style quantitative easing program.

Stocks news

Shares of Thomas Cook Group closed around 12 percent lower after it announced disappointing first half sales. Airlines, including Easyjet, saw their shares fall as a result.

Shares of Carphone Warehouse and Dixons also closed sharply down on Thursday, after the two U.K. electrical stores agreed a 3.8 billion pounds ($6.38 billion) all-shares merger.

Read MoreUK's Dixons and Carphone agree $6.4 billion merger

Deutsche Post shares closed around 5 percent lower after the German company reported weak cash flow for its first quarter and operating profit that missed expectations.

However, shares of the London Stock Exchange Group closed sharply higher on Thursday, after it reported a 50 percent rise in revenue for its full year.

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