European stock markets closed lower on Thursday, as a batch of mixed corporate earnings weighed on technology and consumer staples sectors, while escalating tensions between the US and Iran pushed oil prices higher, further pressuring the benchmark indices.

The Stoxx Europe 600 Index fell 1.2% for the session. The food and beverage sector was the worst performer, dragged down by an 8% drop in shares of Nestlé SA. The company reported weak sales volumes in North America, disappointing investors who had been betting on Chief Executive Officer Philipp Navratil's ability to drive a business turnaround.

The European Central Bank (ECB) held its key interest rates unchanged, waiting for more data to assess whether the price pressures arising from the Iran conflict could warrant further tightening of monetary policy.

"The ECB's decision to hold steady today is perhaps best understood as keeping its foot hovering over the brake pedal," said Madison Faller, Global Investment Strategist at JPMorgan Private Bank. "Policymakers may need to see energy prices fall rapidly, with little sign of price pressures spreading to the broader economy. However, with energy prices and inflation risks back in the spotlight, these conditions appear increasingly difficult to meet."

As Brent crude oil surged 6.3% to trade at $100 per barrel, the energy sector outperformed the broader market. The rally followed US President Donald Trump's threat to intensify strikes against Iran, holding Tehran responsible if Yemen's Houthi rebels continue to attack ships in the Red Sea.

Shares of STMicroelectronics NV plunged 18% after the chipmaker forecast third-quarter sales that fell short of analyst expectations, dampening hopes for a stronger recovery in the semiconductor sector.