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Europe Stocks Close Lower, Dragged Down by Energy Firms; Siemens Gamesa Down 14%

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  • The pan-European Stoxx 600 fell 1%, with oil and gas stocks tumbling 2.7% as crude prices extended losses.
  • Wind energy firm Siemens Gamesa plunged more than 14% after issuing a second profit warning Thursday.
  • In the U.K., Bank of England official Dave Ramsden said the bank may need to tighten sooner than expected.

LONDON — European shares closed lower on Thursday, dragged down by energy companies amid a drop in crude oil prices and a profit warning from Siemens Gamesa.

The pan-European Stoxx 600 closed down by 1% provisionally, with oil and gas stocks tumbling 2.7% as crude prices extended losses Thursday after OPEC+ reportedly reached an agreement on future oil production levels.

Meanwhile, Spanish-German wind energy firm Siemens Gamesa plunged more than 14% to the bottom of the European blue chip index after issuing a second profit warning Thursday. Parent company Siemens Energy also slid over 11%.

Elsewhere, traders continued to digest hotter-than-expected inflation numbers out of the U.S. and U.K., while dovish comments from Federal Reserve Chairman Jerome Powell did little to improve sentiment.

Investors in the U.K. were reacting to comments from Bank of England Deputy Governor Dave Ramsden, who said Wednesday that the central bank may need to consider tightening policy sooner than expected as inflation could rise to 4% later this year. The FTSE 100 tumbled 1.1% Thursday.

On Wall Street, the major U.S. indexes dipped even as second-quarter earnings reports continued to surpass expectations. Morgan Stanley beat on the top and bottom line thanks to strong trading and investment banking performance.

Meanwhile the Labor Department reported that initial jobless claims last week hit a new pandemic-era low of 360,000, in line with Dow Jones estimates.

Globally, market sentiment has been shaken by a rapid rise in Covid-19 cases around the world, as the surging delta variant casts doubts over the economic recovery outlook.

On the data front in Europe, June's U.K. flash employment figures showed a 1.9% year-on-year rise in May.

At the opposite end of the Stoxx 600, Czech cybersecurity software company Avast surged more than 18% after announcing that it was in takeover talks with U.S. peer NortonLifeLock.

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- CNBC's Ryan Browne contributed to this report.

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