European stock markets closed lower on Thursday, with French banking shares leading the decline as renewed political uncertainty emerged following a policy debate linked to the presidential election campaign.

The pan-European STOXX 600 index fell 0.7% by the close, while France's CAC 40 posted the weakest performance among major national benchmarks. BNP Paribas and Société Générale both dropped more than 4%, serving as the primary drag on the index.

Market concerns over French political stability resurfaced as leading presidential candidates began outlining their economic platforms at the annual conference of Medef, the country's main employers' association. All five worst-performing stocks in the STOXX 600 were French-listed companies.

The construction sector underperformed after Eiffage SA reported first-half results that missed expectations. Food and beverage stocks also came under pressure, with Pernod Ricard falling more than 4% following a downward revision to its outlook.

Technology shares, however, bucked the trend, as Nvidia's optimistic sales forecast helped ease worries that the momentum in artificial intelligence spending was beginning to fade. Emilie Tetard, a strategist at Natixis CIB, noted that "Nvidia's results confirm that the AI investment cycle is still ongoing, but European equities are not the best market to benefit from this trend."

European markets have struggled to build momentum this week, with investors seeking fresh catalysts to push benchmark indices higher. Attention now turns to the Jackson Hole Economic Policy Symposium, which begins today, for clues on the future path of U.S. Federal Reserve interest rates.