European shares closed lower on Thursday, as investors shunned riskier assets due to a resurgence in concerns about Russia and sanctioning.
The pan-European FTSEurofirst 300 closed provisionally 1.0 percent lower at 1,363 points, with all major country bourses posting losses.
Russia's MICEX closed down around 2.3 percent and the rouble hit a one month-low against the dollar.
Sanctions hit Russia; Plane crashes
Media reports swirled on Thursday that a plane had crashed in Ukraine near the Russian border. Malaysian Airlines confirmed via Twitter that it had lost contact with plane MH17 from Amsterdam and that its last-known position was over Ukraine.
This came after The United States and Europe announced penalties late Wednesday against Russia for its role in destabilizing neighboring Ukraine. Companies sanctioned by the white House include energy giants Rosneft and Novatek, as well as two banks and eight defense firms. The sanctions will not freeze the Russian firms' assets nor prohibit most transactions with them, but will prevent them from accessing U.S. equity or debt markets for new financing with a maturity beyond 90 days
Russian President Vladimir Putin responded by saying that relations between the U.S. and Russia are in danger of reaching a "dead end" and could damage U.S. business interests in his country, according to reports.
VW-Fiat merger eyed, ITV soars
Shares of Volkswagen closed around 2.5 percent lower, while Fiat shares ended 1.4 percent higher.
Shares of French company Carrefour ended around 1.8 percent higher, after announcing a rise in second-quarter sales on Thursday.
Meanwhile, a final reading of euro zone inflation data for June came in as expected on Thursday, with consumer prices rising 0.5 percent from the year before.