Europe Shares Pare Losses for Flat Close

European shares pared losses to close marginally lower on Thursday, after upbeat economic reports from the U.S.


U.S. data showed that retail sales rose more-than-expected in May, while weekly jobless claims neared a five-year low.

(Read More: Mixed Picture: Jobless Claims Fall, Imports Drop)

The pan-European FTSEurofirst 300 closed provisionally 0.02 percent lower at 1,174.57 points. Earlier in the session, the index traded as much as 1.7 percent lower, as uncertainty over whether central banks will roll back stimulus measures continued to rattle global markets.

"We are seeing the first signs of a lack of confidence in the ability of central banks to control the interest rates, and to stimulate inflation and real GDP growth rates," said Viktor Shvets, the Asia head of strategy research at Macquarie.

Meanwhile in Greece, Prime Minister Antonis Samaras agreed to meet with opposition leaders after the government's abrupt closure of the state broadcasting service caused nationwide strikes and protests.

(Read More: Greeks Strike Over TV Closure; PM Offers Talks)

In Turkey, Prime Minister Tayyip Erdogan issued a "final warning" to anti-government protesters occupying a central Istanbul park. A heavy-handed police crackdown nearly two weeks ago triggered an unprecedented wave of protest against Erdogan and his AK Party.

(Read More: Turkish Prime Minister Gives Protesters 'Final Warning')

Shares in cyclical stocks like basic resources and banks closed higher on Thursday, rebounding from their recent hammering. Strong performers included Banco Popolare di Miano, which closed around 4.7 percent higher, plus Eurasian Natural, Vedanta Resources and Evraz.

However, shares in RBS dropped as much as 8 percent on Thursday, on the news that CEO Stephen Hester will step down later this year, ahead of the bank's prospective re-privatization in 2014/15.

Meanwhile, the future of France Telecom Chief Executive Stephane Richard remained in question on Thursday, after he was put under investigation for conspiracy to commit fraud.

In addition, shares in Home Retail Group closed around 8.8 percent lower on Thursday after its Argos unit reported sales growth that was weaker than expected.