European stocks closed flat on Thursday, after both the Bank of England (BoE) and the European Central Bank (ECB) kept interest rates at record lows.
The pan-European FTSEurofirst 300 Index provisionally closed flat at 1,344.11 points on Thursday. However, the Spanish stock market outperformed for a second consecutive day, with the IBEX closing up around 0.8 percent.
Central bank rate decisions
The main focus for the session was the rate decisions by the two central banks. As expected, the ECB left its main interest rate and its deposit rate unchanged at 0.25 percent and zero, respectively.
In his press conference following the announcement, ECB President Mario Draghi reiterated that the modest recovery in the euro zone was continuing.
Meanwhile, the BoE kept its benchmark rate unchanged at a record-low of 0.5 percent. Gilt purchases stayed at £375 billion ($627 billion), as expected. The BoE also announced it would start reinvesting the cashflow from its bond purchases.
Ukraine in focus
Investors also kept a close eye on events in Ukraine. EU heads of state met at a summit on Thursday to discuss developments. Tensions between Ukraine and Russia have heightened in recent weeks and on Sunday, Russia carried out a bloodless invasion of the Ukrainian peninsula of Crimea.
(Read more: Vitali Klitschko: Putin worried over Ukraine)
Crimea's parliament voted to join Russia on Thursday, and its Moscow-backed government set in motion a referendum that will be held within 10 days. Russia's MICEX Index closed lower by nearly 1 percent.
President Barack Obama on Thursday ordered the freezing of U.S. assets and a ban on travel into the United States of those involved in threatening the sovereignty and territorial integrity of Ukraine.
U.S. stocks rose as investors monitored economic reports ahead of Friday's monthly jobs report, along with developments in Ukraine. The U.S. government reported jobless claims last week declined by 26,000 to 323,000. Another report had U.S. productivity rising 1.8 percent in the fourth quarter.
(Read more: Fed's Plosser 'very worried' about QE consequences)
Back in Western Europe, an index from Halifax showed U.K. house prices rose 2.4 percent in February. For the year, house prices soared 7.9 percent, more than the 7.2 percent predicted by analysts.
German industrial orders also managed to beat expectations. The reading for January came in at 1.2 percent, against a prediction for an uptick of 0.7 percent.
Aviva shares climb
In stocks news, U.K. infrastructure company Balfour Beatty reported a 78 percent collapse in pre-tax profit in 2013. The stock provisionally closed lower by 7.4 percent after the announcement.
Bouygues closed roughly 6.8 percent higher after reports it was bidding to buy Vivendi's SFR, France's second-biggest telecom group. Bouygues' bid will be financed with cash, debt, and shares from the newly combined company and will not require a capital increase, Reuters reported.
Shares in Schroders jumped 5.3 percent higher after the group announced that profits at both its asset management and wealth management business soared in 2013.
British insurer Aviva unveiled a 6 percent increase in operating profit for 2013; shares were around 8 percent higher at close.
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