Europe Markets

Europe closes lower; Ukraine tensions weigh

European market closes lower

European shares closed lower on Wednesday, with investors reacting to disappointing data and concerns about escalating tensions between Russia and Ukraine.

Euro zone data disappoints

The pan-European FTSEurofirst 300 closed provisionally 0.9 percent lower at 1,323.25 points. It pared some losses after U.S. stocks turned hire during the European afternoon.

Markets have been hit by the possibility of an interest rate hike in the U.S., but on Wednesday, traders said were mostly focused on events in Ukraine, as well as weak data from the euro zone.

Italy's FTSE MIB saw heavy selling, provisionally closing 2.7 percent down, after growth data surprised to the downside. Italian gross domestic product fell 0.3 percent in the second-quarter on the same period last year.

German stocks also took a hit, with disappointing data released before the open. German factory orders for June were lower than forecast, plunging 3.2 percent from the month before. The German DAX closed unofficially down 0.7 percent, having hit an intraday low—10.15 percent down from a high point in June.

Read MoreGermany stumbles but not 'canary in the coal mine'

Russia retaliation fears

Russian President Vladimir Putin stepped up his retaliation against Western sanctions on Wednesday. He signed a decree banning or limiting agricultural imports from countries which have hit Russia with sanctions. In addition, a Russian business newspaper reported on Tuesday that Russia was considering banning European airlines flying through Russia airspace.

NATO said on Wednesday that Russia has amassed around 20,000 troops on Ukraine's border, in a "dangerous" escalation of the current crisis. Heavy fighting has erupted in the Ukrainian city of Donetsk, as government forces try to take the area back from pro-Russian separatists.

Read More

Is Ukraine on the brink of a Russian invasion?

Deutsche Telekom tumbles

Shares of Deutsche Telekom closed roughly 2.8 percent lower after Sprint backed away from its offer for Deutsche Telekom carrier T-Mobile U.S. The proposed deal would have created a U.S. rival to Verizon, but failed to clear regulatory hurdles.

Standard Chartered shares closed around 0.7 percent lower after news that it is facing another substantial fine from U.S. regulators. It also announced on Wednesday that its first-half profits fell by 20 percent from the same period in 2013.

Read MoreStanChart profit plunges, new legal problems emerge

ING shares closed up around 1.6 percent after the banking arm of the Dutch financial giant beat earnings expectations in the second quarter of the year.

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