European shares closed lower on Thursday after trimming losses in late afternoon trade, tracking U.S. markets which partially recovered after visiting correction territory, even as fears surrounding Greece's stability resurfaced.
European markets
The FTSE 100 provisionally closed 0.25 percent lower, Germany's DAX was around 0.13 percent higher at the close, while the French CAC closed down around 0.5 percent.
The pan-European Euro Stoxx 600 Index closed lower, but autos financials were among the sectors that recovered from early selling to close in the green. Yields on 10-year Greek bonds rose to as much as 8.9 percent. Italian, Spanish, Portuguese and Belgian bourses all fell over 3 percent, before recovering some losses.
Read MoreGreek drama: Bond yields near 9% threshold
U.S. stocks also stumbled on Thursday, before cutting losses, with crude-oil briefly dipping below $80 a barrel and the 10-year Treasury yield falling under 2 percent, as investors worried about a soft global economy and its possible effect on the U.S. economy. The U.S. government said its count of Americans filing claims for jobless benefits dropped to a 14-year low last week, falling by 23,000 to 264,000, its lowest since 2000.
The Dow Jones Industrial Average, S&P 500 and the Nasdaq all traded sharply lower before recovering.
The drop comes after marked volatility in global markets on Wednesday as investors digested a raft of pessimistic data, including a decline in U.S. retail sales and producer prices.
Read MoreBuyers beware, the bear market has begun: Gartman
There were also fears over the spread of Ebola, deflation, a slowdown in Europe, a fall in oil prices, and weak volumes which all contributed to the negative sentiment, with investors shunning riskier assets in favor of bond markets.
Read MoreLive blog: Europe markets slide; pressure on US futures
Greece sparks further slide
The European Commission moved to ease concerns over Greece on Thursday morning. The Commission's spokesperson Simon O'Connor said it would continue to assist Greece in whatever way was necessary and would ensure a smooth evolution of support for the country after its bailout program finishes.
Greeks stocks slipped as much as 2.5 percent on Thursday but fluctuated throughout the session.
Shire falls again
Shire's shares lost around 10 percent with news that Abbvie - a potential buyer of the U.K. pharma company - was looking to reject the deal due to a change in U.S. tax laws. Shares recovered to close around 7 percent lower.
Roche reported third-quarter sales of 11.78 billion Swiss francs ($12.29 billion) on Thursday, above analysts' forecasts of 11.58 billion Swiss francs in a Reuters poll. Shares closed flat.
Read MoreRoche sales beat forecasts, confirms outlook
Shares of Man Group rose as much as 5 percent before closing 3 percent higher after the investment provider announced a sharp jump in assets under management on Thursday morning.