Europe close: Stocks end lower amid high volatility in banks

European stocks finished the session with hefty losses after European Central Bank president Mario Draghi said the Governing Council did not see a need for further interest rate cuts at present, in turn boosting the value of the single currency, although some analysts still saw scope for further measures if needed.

"Given Mario Draghi’s comments and the heightened concern of the impact of negative interest rates on banks’ margins and profitability - and by implication on their ability and willingness to lend – it does seem more likely than not that Eurozone interest rates really have now reached their low.

"It does look entirely possible though that the ECB could take further QE and liquidity measures should the downside risks to Eurozone inflation deepen further or even fail to ease," Dr. Howard Archer, chief UK and European economist at IHS Global Insight said in a research note sent to clients.

Some analysts, a minority, expressed regret that the ECB had not moved towards a tiered system of interest rates, which some believed would help to protect banks’ profit margins.

On 9 March, the International Monetary Fund’s first deputy Managing Director, David Lipton, had warned against countries employing policies aimed at weakening their currencies.

The benchmark DJ Stoxx Europe 600 index finished down by 1.66% at 333.50 points and France’s CAC 40 were both up 0.2%, while Germany’s DAX was 0.3% higher.

A sector gauge of bank shares ended the session with losses of 0.22%, slipping by 0.34 points to 152.64 after hitting an intraday high above 160 points.

However, as of 13:42GMT, just after Draghi had begun speaking, the shares of all 30 lenders in the Euro Stoxx Banks Index had been trading higher, with the sector gauge registering an advance of 3.7%. In parallel, the Markit iTraxx Europe Index of credit-default swaps on the high-yield of 75 companies plummeted by over 40 basis points to 335.

West Texas Intermediate crude oil futures were down 2.4% to $37.38 a barrel and Brent crude down by 2.96% at $39.89 on the ICE, after a report indicated Iran was holding out from a meeting with other major oil producers to decide upon a freeze in their current levels of output.

The DJ Stoxx 600 Oil&Gas sector index closed with losses of 3.08% at 260.78 and that for Basic Resources off by 3.86% to 258.56.

Three-month copper futures edged down by 0.9% to $4,897.50 per metric tonne in LME trading.

In corporate news, Aviva was the standout gainer on the FTSE 100 after the insurer reported better-than-expected full year profit.

Societe Generale edged up as it announced plans to cut 550 jobs by 2020 in an attempt to streamline its operations and posted a drop in 2015 profit.

French supermarket operator Carrefour slipped despite posting a rise in full year operating profit.

German resources group K+S was in the red after it cautioned it would post a big drop in operating profit this year.

Shares in French media company Lagardere tumbled after disappointing results.