Europe close: Stocks drop after Commission queries six states on fiscal plans

Stocks across the Continent retreated on Thursday, with investor sentiment souring following the release of a 'hawkish' set of US central bank meeting minutes the day before.

Also weighing on sentiment were reports that the European Commission was set to query six euro area countries regarding their budget plans.

In the case of Italy, the EC said its draft budget points to "particularly serious non-compliance with the Pact's obligations", ANSA reported.

The other countries that were set to get a slap on the wrist reportedly included Belgium, France, Portugal, Slovenia and Spain.

Regarding the latter, Brussels was reportedly especially inquisitive as pertained to Madrid's projections for economic growth and its projections for tax revenues from its proposed 'Google- tax' and on financial transactions.

The pan-European Stoxx 600 benchmark dipped only 0.27% or 0.98 points to 362.56, but the Dax reversed earlier gains and fell 1.07% or 125.82 points to 11,589.21, while the FTSE Mibtel was down by 1.18% or 230.25 point to 19,224.74.

In parallel, the yield on the benchmark 10-year Italian government note was climbing by 14 basis points to 3.69% and that on similarly-dated Spanish debt by eight basis points to 1.73%.

After the close of markets, European Central Bank chief, Mario Draghi, issued a warning linked to the above, saying that questioning the single currency bloc's rules could worsen financial conditions and damage growth, Bloomberg reported citing an official familiar with his remarks.

The same official told Bloomberg that Draghi was positive on the outlook for the Eurozone economy but that it "has turned a little bit darker".

Both Italian premier, Giuseppe Conte, and Spanish president, Pedro Sanchez, reportedly tried to downplay criticism from the EU capital.

Brent crude oil futures were again trading on their back foot, drifting down by 0.4% to $79.74 a barrel on the ICE, against the backdrop of a US dollar index that was near its best levels of the session.

Paris's Cac-40 meanwhile gave back 0.55% or 28.16 points to finish at 5,116.79 and Madrid's Ibex 35 was down 1.20% at 8,889.60.

Weighing on the latter, the country's Supreme Court ruled that it was lenders, and not borrowers, who were liable to pay stamp duty on home mortgages.

However, it remained to be seen to what extent the ruling would be applied retroactively. Depending on the region of Spain in which one lived, the duty could range between 0.5% and 1.5% of the value of the mortgage.

Spanish lenders' shares were left reeling, with Banco Sabadell shares off by 6.70%, Bankinter down 6.26% and Bankia lower by 5.11%.

At the pan-European level meanwhile, the Stoxx 600's sector gauge for lenders was down by 1.69% to 145.60 - having plumbed a fresh 52-week low during the session.

On a chipper note, Swiss drugs giant, Novartis, posted a 2.6% rise in core earnings per share, slightly missing analysts' forecasts. However, the company also nudged its forecasts for full-year sales higher, predicting growth in the "mid-single-digit" range.

Market commentary around the announcement that it would acquire US cancer-drug maker, Endocyte, for $2.1bn was also positive.

But the standout rise was Publicis Groupe, after the media giant announced its intention to sell its non-core health business, sending its shares 7.96% higher.

That announcement helped to offset news that the company's organic revenues rose by only 1.3% over the third quarter of 2018 to €2.197bn, which fell short of analysts' forecasts.