Europe closes lower on Catalonia uncertainty and mixed earnings

Key Points
  • On Thursday, Spain's government stated that it would move to suspend Catalonia's autonomy
  • The first day of the EU summit in Brussels kicked off, with Brexit a key point of discussion
  • Tele2 and IWG were the STOXX 600's biggest movers, following company updates

European markets closed lower Thursday afternoon, as the crisis surrounding Catalonia escalated and earnings season delivered a mixed bag of results.

The pan-European STOXX 600 slipped more than 0.6 percent, with all but four sectors falling into negative territory.

Catalonia crisis reaches new heights

The Spanish central government stated Thursday morning that it would move to suspend Catalonia's autonomy after regional leader Carles Puigdemont failed to drop a bid for independence or provide clarity on the matter. The Spanish IBEX slipped 0.74 percent on the day.

Catalan politician: Spanish government's push for Article 155 unexpected

Earnings deliver mixed results

Earnings season was in full swing on Thursday, with a whole host of companies reporting figures. Tele2 was Europe's top performer, soaring more than 5.5 percent on news that the operator has raised its guidance after third-quarter profit beat expectations.

Builders' merchant Travis Perkins also rose on earnings, ticking up more than 2.2 percent higher, after the group posted a rise in sales growth. Carrefour and Pernod Ricard both ended near the top of the STOXX 600, after both French-listed firms recently published earnings reports.

Business can cover a growing dividend going forward: Tele2 CEO

However, not every company was celebrating when it came to earnings.

Unilever reported a slowdown in third-quarter revenue, placing blame on natural disasters, and poor weather in Europe for slowing growth. Shares of the consumer goods firm slipped more than 5.5 percent, falling to the bottom of the household goods sector.

Meanwhile, advertiser Publicis tumbled nearly 7 percent in trade after the group published third-quarter sales which missed analyst forecasts.

The STOXX 600's worst performing stock however was London-listed IWG, after the group issued a trading update which stated that group operating profit for the year was now expected to be "materially below market expectations." Shares tanked over 32 percent.

Meanwhile, shares of the London Stock Exchange Group fell into the red after it announced that CEO Xavier Rolet would be leaving the group by the end of 2018.

On Wall Street, stocks opened lower following a record-setting session in which the Dow Jones industrial average closed above 23,000 for the first time.

EU Summit begins

Aside from Catalonia, Brexit lingered at the back of investors' minds Thursday, as leading figures met in Brussels for day one of the EU Summit.

One key topic expected to dominate the two-day summit will be that of how the Brexit negotiations are coming along.

In data news, British retail sales saw an unexpected sharp slowdown in the last month, with sales volumes falling 0.8 percent in September, according to the Office for National Statistics. Sterling came under pressure following the data.

—CNBC's Holly Ellyatt contributed to this report