Europe close: Stocks end off lows despite hawkish central banks

European stocks ended off their worst levels of the session even as traders digested the latest policy surprises from central banks.

By the close, the benchmark Stoxx 600 was lower by 0.39% or 1.53 points at 386.05, alongside a drop of 0.89% or 114.14 points to 12,691.81 for the German Dax and a 0.50% retreat in the Cac-40 to 5,216.88.

In parallel, front month Brent crude oil futures slipped 0.19% to $46.91 a barrel, adding to hefty losses in the previous session on the back of US government data showing an unexpected build in the country's gasoline inventories. Technical analyst Jose Maria Rodriguez at Web Financial Group continued to point to $46.64 a barrel as the 'make-or-break' level for Brent futures in the very near-term.

As expected, the Swiss National Bank kept all its main policy rates unchanged on Thursday morning.

The Monetary Policy Committee also sprang a surprise for traders, with three of its eight members voting for a 25bp hike in Bank Rate, versus just one in May.

Overnight, the US Federal Reserve stuck to the script, raising its own main policy rate by 25 basis points, albeit while flagging that it will begin to shrink its balance sheet in 2017. The US interest rate curve flatted appreciably following the decision, nearing its flattest level since 2007.

Data out Stateside on Thursday revealed the jobs market continued to be in good health, with initial weekly unemployment claims printing at 237,000 (consensus: 242,000).

The Philly Fed's manufacturing index on the other hand retreated from a reading of 38.8 for May to 27.6 in June (consensus: 24.0).

In parallel, INSEE confirmed that harmonised French consumer prices rose by 0.9% year-on-year in May, which was less than the advance of 1.4% seen in April.

Meanwhile, in Italy the harmonised CPI for May printed at 1.6%, down from 2.0% in the prior month (consensus: 1.5%).

Stock in Deutsche Bank retreated after Bloomberg reported the lender was reorganising its corporate and investment banking division.

Italy's state railways Ferrovie dello Stato chose Nomura to advise it on a possible flotation on the Milan bourse, Reuters reported.