Europe ends sharply higher despite oil slump; Lloyds up 13%

European markets posted strong gains by Thursday's close, as investors cheered on a positive set of corporate earnings, rather than dwelling on the slump in oil prices.

The pan-European Stoxx 600 index came off session highs, yet closed up 2 percent provisionally, with banks and telecoms leading in the sector space, both finishing above 3 percent.

European markets came under slight pressure during morning trade after data showed that the inflation rate in the euro zone in January was 0.3 percent year-on-year, rather than a preliminary reading of 0.4 percent.

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London's FTSE 100 jumped 2.5 percent by the close, supported by news that the U.K.'s fourth-quarter GDP was revised upwards to 0.5 percent, quarter-on-quarter, from a preliminary reading of 0.4 percent. France's CAC finished over 2 percent higher, while Germany's DAX finished 1.8 percent up.

In markets overseas, Chinese shares took a tumble as liquidity was tightening again in the markets, with Asia overall finishing mixed. U.S. stocks treaded water despite a better-than-expected durable goods report, as a slip in energy prices capped gains.

Oil prices failed to stay positive as the burden of a global supply glut and growth concerns dominated sentiment. Prices slipped over 2 percent despite U.S. demand for gasoline coming in at 9.06 million barrels per day, higher than the previous week, according to the Department of Energy.

Brent crude fell into over 50 cents to last stand around $33.80, while U.S. WTI crude fell over 2 percent, last trading around $31.40. Oil and gas stocks however shook off the price decline, with Seadrill closing up near 9 percent and Statoil up 3 percent.

French oil firm, Technip led the sector, finishing up over 11.5 percent, after the company posted its fourth-quarter earnings. In the report, the company said while it expects business to dip during this coming year, it believes its 2016 dividend is well covered, according to Reuters.

Basic Resources was the only sector to close in the red, as a decline in metal prices weighed on stocks. Rio Tinto closed over 3.5 percent down.

Earnings to the rescue: Lloyds jumps 13.6%

Earnings season was in full swing, with businesses reporting a positive set of results on Thursday.

Lloyds Banking Group was one of Europe's best performers, with shares closing 13.6 percent higher, after reporting a 5 percent rise in its underlying full-year profit. However, the bank also set aside another 2.1 billion pounds in the fourth quarter of 2015 to cover compensation for customers mis-sold loan insurance.

RSA Insurance was also a market leader, closing up trade at 9.8 percent, after reporting a 43 percent rise in operating profit. This boosted other London-listed insurance stocks, including Prudential.

Anheuser Busch InBev, the world's largest brewer, hiked its proposed dividend and forecast challenging markets in Brazil and China after fourth-quarter earnings came in below expectations. Shares of the brewer slipped 1.7 percent.

The world's second largest visitor attractions operator, Merlin Entertainments, posted a slight rise in profit for 2015, despite last year being the "most difficult" in its history, due to a fall in visitor numbers from one of its top U.K. theme parks, Alton Towers. Shares closed up over 4 percent.

Europe's worst performer was Zodiac Aerospace, tanking over 25 percent, after the equipment maker announced a profit warning.

Meanwhile Germany's biggest telecoms operator Deutsche Telekom beat expectations for its fourth-quarter results as profits grew in its home market as well as at its U.S. operations, Reuters reported. Shares of Deutsche Telekom ended over 2 percent higher.

In other news, U.K. telecoms giant BT has been ordered by the country's communications watchdog to open its cable network Openreach to rivals. Shares of BT however finished up 4.6 percent.

Elsewhere in the world, the Group of 20 (G20) nations must plan now for a coordinated stimulus program to keep a slowing global economy from stalling, International Monetary Fund staff said in a report on Wednesday.

Elsewhere, analysts at Citigroup said in a note Wednesday that the risk of the global economy falling into a recession is rising as fundamentals remain poor.

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