European markets close down 2% amid Ukraine-Russia tensions; travel stocks slide 4.5%

LONDON — European stocks closed sharply lower Thursday, after a choppy trading session, as tensions remained high over the Russia-Ukraine crisis.

The pan-European Stoxx 600 closed down by 2%, having gained around 0.5% at the open. Utilities fell 3.5% to lead losses while basic resources rose 0.8% as raw material prices rose.

The indecisive trade for European stocks came amid heightened fears for Ukraine's future with more reports of explosions in the capital Kyiv overnight.

Earlier this week a huge column of Russian military vehicles was making its way toward the capital prompting concerns that Russia would soon launch a large-scale attack on the city.

Ukraine's second biggest city, Kharkiv, suffered heavy bombardment, while Kherson's mayor said Russian forces have seized control of the key port city in southern Ukraine.

On Wall Street Thursday, U.S. stocks fell as rapid moves in the energy and bond markets slowed and investors monitored the war in Ukraine.

Austrian retail bank Erste Group climbed 9.5% in Europe to lead the Stoxx 600.

At the bottom of the European blue chip index, Anglo-Russian miner Polymetal International continued to crash due to its Russian exposure, shedding more than 37%.

Societe Generale said Thursday it would be able to cope if its Russian business was to be stripped away. The French lender said its exposure in Russia totaled 18 billion euros ($19.97 billion). Shares fell by 0.6%.

— CNBC's Eustance Huang contributed to this market report.