The benchmark index in Milan dropped 3.4% after energy companies listed on the exchange led the decliners.
The energy sector stocks fell sharply after the oil platform services provider plunged 34% after it issued profit warning. Imperial Tobacco also dropped 4% after it guided lower earnings.
Saipem plummeted 34% to 20 euros after the oil and gas contractor lowered its estimate of operating earnings for 2012 by 6% to 1.5 billion euros and guided operating earnings to drop further to 750 million euros in 2013.
Eni SpA, the oil explorer that controls 43% stake in Saipem, declined 4.7% to 18.40 euros.
Other energy companies in the region also closed lower. Subsea 7 SA decreased 5.4% to 132 kroner and Technip SA plunged 7% to 77.45 euros.
Luxottica Group SpA increased 2% to 34.30 euros after the largest sunglass maker and retailer said sales increased 14% in 2012 to 7.09 billion euros.
Imperial Tobacco Group Plc dropped 4% to 2,361 pence after the tobacco maker estimated lower profit in the first half of this year.
Nordea increased 3% to SK68.45 after the lender said net income increased to 840 million euros from 785 million euros a year ago.
Roche Holding AG declined 1.4% to Sfr198.30 after the largest maker of cancer drugs increased its dividend to Sfr7.35 a share and reported full-year 2012 earnings per share excluding some items of Sfr13.62.
Swedbank soared 10% to SK149 after the Swedish bank said net income increased to SK4.34 billion in the fourth quarter compared to SK965 million a year ago. The bank also proposed to increase the dividend to SK9.90 from SK5.30 a year ago.