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Europe ends flat after ECB decision; Greece weighs

European equities ended flat on Thursday after the European Central Bank (ECB) put more pressure on Greece to come to an agreement with its lenders over the future of its bailout program.

Greece weighs

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FTSE
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IBEX 35
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The pan-European Euro Stoxx 600 Index and most of Europe's major bourses closed flat. Europe's so-called periphery was the worst hit, with the Portuguese PSI 20 finishing around 0.3 percent lower, recovering from earlier selling. The Spanish IBEX 35 and the Italian FTSE MIB both closed down around 0.5 percent lower.

Meanwhile, Greek stocks were down around 5 percent in afternoon trading, before closing over 3 percent lower. Greece's Bank of Piraeus lost 27 percent at the open, the National Bank of Greece was down 26 percent and Alpha Bank lost 13 percent.

Late Wednesday,the ECB took a hard line on Greek debt, revoking a waiver that allowed banks to use Greek government debt as collateral for loans.

The Greek stock exchange opened down nearly 9 percent in reaction to the ECB's decision, with some banking stocks losing up to a fifth of their value.

In a statement late Wednesday, the ECB said it was no longer able to assume there would be a successful conclusion to the Greek government's bailout program review. Since coming to power almost two weeks ago, the new Greek government – led by the Syriza party – has sought to overhaul the nation's bailout program with European Institutions.

U.S. stocks traded higher on Thursday, encouraged by oil gains and shaking off concerns about Greece and U.S. data ahead of tomorrow's all-important jobs report.

China cuts

On the data front, the European Commission's winter forecasts on Thursday upgraded growth estimates for the euro zone this year. The figure is now expected to be 1.3 percent in 2015, up from a previous estimate of 1.1 percent in November.

Greek talks have overshadowed other news in financial markets, including the People's Bank of China's decision on Wednesday to reduce the reserve requirement ratio (RRR) for major banks by 50 basis points for the first time in two years. The easing measures by the central bank come amid increasing signs of a slowdown in the world's second-largest economy.

BNP Paribas falls

In the U.K., the Bank of England (BoE) left its benchmark interest rate unchanged Thursday -- as expected – as the prolonged risk of stubbornly low inflation pushes back expectations of an interest rate rise, with a hike in 2015 now looking less likely.

In individual stocks news, French bank BNP Paribas reported a sharp decline in full-year net profit on Thursday, of 157 million euros ($178 million) in 2014 -- down 96.7 percent on the previous year, sending shares over 4 percent lower.

Shares of AstraZeneca fell 2.7 percent after the pharma firm reported a fourth-quarter loss on Thursday morning.

- CNBC's Everett Rosenfeld contributed to this market update.