Europe stocks close lower; banks, chemicals weigh

LONDON Aug 27 (Reuters) - European shares closed lower in a choppy session on Thursday after banking stocks retreated from earlier gains and chemical makers slipped.

The pan-European FTSEurofirst 300 .FTEU3 index of top shares provisionally closed down 0.5 percent at 968.75 points after being up as much as 976.79 points earlier in the session.

"The U.S. GDP figures were not as bad as expected," said Peter Dixon, an economist at Commerzbank. "Markets have demonstrated a lot of volatility in recent days and I think markets will see-saw on the back of good and bad news."

"U.S. jobless figures were a little bit worse than expected, but still were an improvement on the previous week. These numbers are volatile and I would not want to base any kind of assessment on these numbers," he said.

U.S. jobless claims fell last week to 570,000, slightly above the 565,000 predicted by analysts. [ID:nN27309693]

Data also showed the U.S. economy contracted at an annualised rate of 1.0 percent in the second-quarter, the same as its initial reading. Analysts had predicted a downwardly revised reading of minus 1.5 percent. [ID:nN27303385]

Banks reversed from earlier gains to feature among the worst performers. Deutsche Bank (DBKGn.DE), Lloyds Banking Group (LLOY.L) and Credit Suisse (CSGN.VX) were down 0.8 to 3 percent.

Chemical stocks were lower. German drugmaker Bayer BAYG.DE fell 4.2 percent after traders pointed to concerns that peer Boehringer Ingelheim may report strong data about its rival drug to Bayer's anti-blood-clotting pill Xarelto. (Reporting by Joanne Frearson, editing by Atul Prakash)