European equities reversed sharp gains to finish firmly in the red on Thursday, following comments by Mario Draghi, the president of the European Central Bank (ECB) and a sharp slip in commodity prices.
The pan-European Stoxx 600 index fell 1.7 percent by the close, with all sectors closing in the red. Autos was the worst performer, off 4.1 percent as a sector.
All major bourses finished in negative territory, with London's FTSE tumbling 1.8 percent following a sell-off in mining stocks. Despite earlier highs, France's CAC slipped 1.7 percent and Germany's DAX slumped 2.3 percent by the close.
Earlier on in the day, the pan-European Stoxx 600 index surged over 2 percent after an ECB rate decision, but pared some gains as Draghi spoke at a press conference. He said that he did not anticipate the need to reduce rates further, but added that new facts could change the situation. This dampened "risk-on" sentiment and the euro climbed higher after initially falling.
including a cut to its main refinancing rate to 0.0 percent and a cut to its deposit rate to -0.4 percent. The bank also extended its monthly asset purchases to 80 billion euros. At Europe's close, the euro was up against the dollar, trading at $1.116.
On the news, Europe's banks rose over 4 percent, however a sharp sell-off in markets saw the sector close down 0.5 percent.
Despite the sharp sell-off in markets, Italian banks posted solid gains by the close, despite some paring. Unicredit reached as high as 11 percent, before closing 2.3 percent up, while Banca Popolare di Milano led the sector, up almost 5 percent.
Italy's FTSE MIB gained as much as 4.2 percent, before closing 0.5 percent down. Several European banks remained higher, including Spanish bank, BBVA, which closed some 1.3 percent higher. London-listed banks sank to the bottom of the sector, including Barclays off 4.9 percent.
Oil prices fell back into negative territory on Thursday following news that refinery maintenance threatened to raise record inventories of crude and sources said an OPEC production freeze meeting was unlikely without Iran's participation, according to Reuters.
Brent crude slipped over 2.5 percent to $39.85 a barrel at Europe's close, while U.S. crude tumbled over 2 percent to $37.36. This knocked confidence in the oil and gas sector, with Seadrill tanking 9.5 percent, and oil majors BP and Shell fell over 3.5 percent each.
Miners were also feeling the heat, after several metal prices slipped during trade, weighing on the FTSE index. Basic Resources was one of Europe's worst performing sectors, off 3.8 percent. Anglo American and BHP Billiton both closed sharply down, off 5 percent or more.
Meanwhile in Asia, markets finished mixed as traders digested another round of Chinese economic data and interest rate decisions from central banks in New Zealand and South Korea.
U.S. markets failed to hold onto earlier gains at Europe's close, as energy stocks and a slip in prices continued to weigh on sentiment.
On Thursday, retailer Carrefour proposed raising its 2015 dividend by 2.9 percent to 0.70 euros a share after operating profit rose 2.4 percent to 2.445 billion euros ($2.68 billion), in line with a Thomson Reuters poll average of 2.45 billion euros, Reuters reported. Its shares closed some 6.5 percent lower, making it one of the worst performers.
Lagardere slipped to the bottom of benchmarks, off over 13 percent after the French media firm's results disappointed investors. This comes shortly after the company announced its chief financial officer was departing.
Fertiliser group K+S tumbled 10.4 percent after it warned that 2016 could see a significant drop in the company's operating profit.
Nasdaq said on Wednesday it would buy U.S. options exchange operator International Securities Exchange for $1.1 billion from Deutsche Boerse, the latest deal to emerge from a spate of exchange merger talks, Reuters reported.
In other news, the Reserve Bank of New Zealand surprised the markets by cutting its lending rates to a record low of 2.25 percent, its fifth time since June 2015. The New Zealand dollar fell over 1 percent on the back of the central bank's move.