Europe Markets

Europe shares close up on ECB; Asos plummets 30%

Europe shares close up on ECB; Asos plummets 30%

European shares closed higher on Thursday, as investors digested the raft of stimulus measures announced by the European Central Bank (ECB) to halt deflation and fire up the economy.

Draghi to the rescue

The pan-European FTSEurofirst 300 closed provisionally 0.4 percent higher at 1,380.63 points, after the ECB cut its main interest rate to 0.15 percent from 0.25 percent, and its deposit rate to minus 0.1 percent from 0 percent.

"This was a historic move by a major central bank," Mark Luschini, chief investment strategist at Janney Montgomery Scott, said.

In his subsequent press conference, ECB President Mario Draghi announced yet more stimulus measures, including preparations to start the purchase of asset-backed securities.

Read MoreDraghi breaks newground with negative interest rate

He also said the bank planned to provide new cheap loans for banks and that it would cease "sterilizing" its past purchases of euro zone sovereign bonds.

The benchmark German DAX and French CAC closed unofficially higher by 0.2 percent and 1.0 percent respectively. Peripheral euro zone stocks saw the biggest gains, with the Spanish IBEX ending around 1.0 percent higher and Italian's FTSE MIB gaining 1.5 percent.

After weakening against the U.S. dollar, the euro held at $1.36.

We must improve Europe: Draghi

On the data front, June retail sales for the euro zone showed their strongest annual growth for seven years on Thursday. Sales rose 2.4 percent on the year and 0.4 percent on the month, beating market estimates.

Meanwhile, the Bank of England left its interest rate unchanged on Thursday and kept its asset purchases on hold, as expected. The U.K. FTSE 100 index closed 0.1 percent lower.

Read MoreSterling faces pressure as BoE holds rates

Asos shares tank

Shares of Asos plunged more than 31 percent on Thursday after the U.K. online retailer issued a profit warning highlighting lower margins and a hit from strong sterling on earnings. It shares have rallied spectacularly in the last few years, with valuations reaching a high level compared to the wider market.

Meanwhile, Smith & Nephew shares closed around 2.4 percent higher on speculation that the medical products company could be bid for by the U.S.'s Medtronic.

Deutsche Bank shares closed roughly 3.6 percent lower after the German bank announced the pricing details of its share issue. The 299.8 million in new shares priced at 22.50 euros ($30.63).

Read MoreDeutsche Bank capital hike prices at 24% discount

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