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European markets close lower; BMPS poised for state bailout

Alessandra Benedetti | Bloomberg via Getty Images

European stocks closed lower Thursday amid concerns over the the fragility of the Italian banking system and as trading desks began to thin out before the long Christmas break.

The pan-European Stoxx 600 ended the day 0.21 percent lower with most sectors in negative territory.

BMPS shares fall again

Banking stocks were slightly lower in early afternoon trade on Thursday as the Italian state is poised to rescue Monte dei Paschi di Siena with a 20 billion euro aid package and a plan to force losses on bondholders. This follows the bank's admission on Wednesday evening that its hoped-for private 5 billion-euro ($5.2 billion) recapitalization had failed.

The world's oldest bank has struggled for a sustained period of time yet its problems were exacerbated further by former Prime Minister Matteo Renzi's referendum defeat. BMPS shares slumped to their lowest ever share price on Thursday and were 6 percent lower at the close.

Switzerland's Actelion was among the top performers on Thursday, up more than 4 percent after overnight news that it had officially entered exclusive negotiations with U.S. peer Johnson & Johnson. France's Sanofi, seen as another possible contender for an Actelion buyout, also opened higher, gaining more than one percent out of the gates.

Nokia had hit the bottom of the list of key European stocks in early trade, losing 4.5 percent, following Wednesday's news it is set to sue Apple for patent infringement.

Mediaset then plunged below Nokia on Thursday to become the worst performing firm on the pan-European list after Italy's industry minister declared his unhappiness with Vivendi's aggressive stake building in the Italian television broadcaster. The minister stopped short of stating he and the government would attempt to block the deal altogether, however, shares fell 12 percent on the news.

In the U.S., the Dow Jones Industrial Average and the broader S&P500 were trading lower, down 0.2 percent and 0.3 percent respectively.

Oil prices slipped in tepid trading on Thursday as an unexpected rise in U.S. crude inventories last week as well as moves by Libya to boost output over the next few months impacted investor sentiment, according to a Reuters report.

Brent crude futures traded at $54.96 per barrel in afternoon trade on Thursday while U.S. West Texas Intermediate (WTI) crude futures was trading around $52.90 a barrel.

The Berlin Christmas market where 12 people were killed and 49 more were injured, after a truck ploughed through a crowd of people on Monday, has reopened.

All eyes are looking to a series of U.S. economic data to be released Thursday afternoon to provide the subdued market with a catalyst for trading activity.

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