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Europe closes mixed; FTSE rallies after Budget speech

European equities closed mixed on Wednesday as investors awaited the outcome of the U.S. Federal Reserve's two-day policy meeting and digested the annual U.K. Budget statement.

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IBEX 35
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The U.K.'s benchmark FTSE 100 finished around 1.5 percent higher, while the German DAX and the FTSE MIB and ended lower. The French CAC ended flat.

U.K. investors focused on the Budget, which was presented by the country's finance minister, George Osborne, around midday. The FTSE built on gains during and after Osborne's speech.

Read MoreLive blog: Osborne out to woo voters in UK Budget


Osborne upped his economic growth forecast for 2016 to 2.3 percent, but revised down growth figures for last year. He also signaled plans to scale back austerity measures—just in time for May's national election.

Read MoreDid the UK just call time on austerity?

Notably, the Budget contained tax cuts and benefits aimed at boosting the U.K.'s North Sea oil industry. British oil majors continued to gain after the announcement, with Royal Dutch Shell and BP rising by around 2 percent on the day.

Swedish stocks hit new highs

Sweden's Riksbank cuts its repo rate further into negative territory, to minus 0.25 percent. The Swedish benchmark OMX-S 30 jumped up 1.9 percent on the news, reaching a record high.

Standard Chartered soars

In individual stock news, shares of lender Standard Chartered closed 7.5 percent higher and topped the FTSE 100 after a price upgrade by analysts at Barclays.

Another top performer in Europe was Netherlands-based SBM Offshore, which surged over 8 percent on reports of settlement talks in Brazil regarding a bribery case.

In addition, telecom company Prysmian climbed 3.6 percent on the FTSE MIB on reports denying it was in talks with General Cable over a possible acquisition deal.

Outside of Europe, investors awaited the U.S. Federal Reserve's latest policy statement, due later on Wednesday. Wall Street stocks traded lower in anticipation.

Speculation has mounted that the Fed could drop the word "patience" from its guidance about the pace at which it will normalize monetary policy. Some investors think that U.S. interest rates could be raised as early as June.

Closer to home, Greece frustrated its euro zone peers by refusing to give an update on its reform progress at a scheduled teleconference on Tuesday, insisting instead that the discussions should be delayed until Thursday's European Union summit.

Read MoreMost Germans now favor Grexit as relations sour

The Greek Athens Composite index finished more than 4 percent lower on Wednesday.

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