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Europe ends sharply higher; Swiss stocks slide

European equities rallied after a volatile session of trade on Thursday to close sharply higher, following action from the Swiss National Bank.

The pan-European Euro Stoxx 600 Index ended provisionally 2.6 percent higher, after veering between gains and losses for much of the session.

This came after the Swiss National bank shocked markets by abandoning its currency cap against the euro.

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French and German stocks both closed over 2 percent higher after the decision. However, Swiss stocks fell by more than 10 percent at one point on the news, and the Swiss franc gained up to 30 percent against the euro.

"(Swiss) companies will find that their exports suddenly become much more expensive, with the resultant hit to margins that will entail, while broader European stocks should feel the benefit as the euro weakens," Michael Hewson, the chief market analyst at CMC Markets, said in a note.

"Switzerland suddenly got a whole lot more expensive and for chocolate lovers Nestle and/or Lindt chocolate just got a whole lot more expensive."

Read MoreStunned: Swiss banks, watchmakers hit hard

Major Swiss companies like Richemont, Swatch, Actelion Holdings, UBS and Julius Baer closed over 11 percent lower on the day.

Trade in Swiss stocks around 8:10 am ET:

The price of oil fell back into the red on Thursday, but failed to take energy stocks with it. Oil majors majors like BP,Shell and Total all rallied close to 3 percent.

The basic resources sector also ended around 3 percent higher, after posting heavy losses in the previous trading session.

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In other stocks news, shares of U.K. housebuilder Bovis Homes closed around 6 percent lower after it announced sales in 2015 could slow.

On the data front, a flash German growth figure showed the economy expanded by 0.25 percent in the fourth quarter of 2014, compared with the previous quarter.

U.S. stocks fell on Thursday, extending a four-session losing stretch, as investors considered the price of crude and disappointing quarterly results from large U.S. banks.

Shares of Bank of America dropped after the bank reported a 14 percent fall in quarterly profit; Citigroup also declined as it posted a slim fourth-quarter profit.

However, Target shares rose after the discount retailer should it would discontinue operations in Canada.

Read MoreTarget's post-Canada wish list: Stores, mannequins

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