Europe's blue-chip gauge closed fractionally lower, with French banks weighing amid growing fears the euro zone's second-largest economy will be sucked into the region's sovereign debt crisis.

French lenders BNP Paribas and Societe Generale were among the biggest fallers on the FTSEurofirst 300 <.FTEU3> as yields on French sovereign bonds rose for a third consecutive session, pointing to growing market nervousness about the country's public finances.

France, with its huge exposure to Italy, is getting caught up in the fear factor, said David Morrison, market strategist at GFT Global.

FTSEurofirst 300 provisionally ended the session down 0.3 percent, at 972.17 points, after trimming losses in afternoon trading on the back of better-than-expected U.S. retail sales data. France's CAC 40 index <.FCHI> tumbled 1.9 percent.