European Stocks Fall Sharply on Thursday

European stocks closed sharply lower on Thursday, as the surge in energy prices risked higher interest rates in the Eurozone, while markets parsed a series of earnings results.

The Euro STOXX 50 fell 1.7% to 6,210 and the STOXX Europe 600 dropped 1.3% to 638.

UniCredit sank 4.8% despite posting results that reflected a strong quarter, as its ambition to acquire Germany's Commerzbank jeopardized its share buyback program.

Meanwhile, BNP Paribas lost 2.8% despite beating profit estimates, tracking other banks after amid tighter financial conditions.

The ECB held rate unchanged, as expected, and signaled that pro-inflationary risks may warrant more rate hikes in the future.

Such risks were consolidated by a surge in gas prices as escalation to the US-Iran war further dented tanker flows from the region.

Meanwhile, luxury stocks fell with LVMH, Hermes, and Ferrari dropping over 3.5%, pressured by poor results from Moncler.