Europe Markets

Europe shares close higher on Fed, ECB

European market closes higher
European market closes higher

European shares closed higher on Thursday after an announcement from the European Central Bank (ECB) on how it will make key decisions in the future.

Investors also showed relief over the U.S. Federal Reserve's renewed vow to keep benchmark rates low for an extended period of time.

The pan-European FTSEurofirst 300 provisionally closed 0.9 percent higher at 1397.

The index originally shot higher mid-morning on Thursday after the ECB announced a new rotating voting system that raised hopes for euro zone quantitative easing (QE).

European markets

The new rotation system for the ECB's Governing Council means Jens Weidmann, the governor of the German Bundesbank, will sit out the council meetings in May and October next year. Weidmann has traditionally been critical of ECB aggressive stimulus measures, so his prospective absence increased market speculation the ECB might yet launch a QE program as early as May.

Read MoreECB doles out cheap loans to banks, fuels QE hopes

Markets had already started on a positive footing after the Fed on Wednesday reiterated its "considerable time" wording in reference to how long it would hold off on hiking interest rates.

"Language around economic activity was practically identical to the July statement," Evan Lucas a market strategist at IG Markets, said in a research note.

Fed remains set for a rate hike by mid-2015: UBS
Fed remains set for a rate hike by mid-2015: UBS

The U.K.'s FTSE 100 continued to marginally underperform other bourses on Thursday, as Scots headed to the polls for the country's independence referendum. The index closed provisionally 0.5 percent higher.

The vote is seen as close, but bookmakers are predicting a win for the "No" campaign.

Read MoreScottish vote weighs pride against risk

The Italian FTSE MIB pared gains to close unofficially 0.1 percent up, after the International Monetary Fund cuts it growth outlook. Its economy is seen shrinking in 2014 for a third-year running.

Bayer shares surge

In stocks news, Bayer rose to the top of benchmarks. The German firm said on Thursday that it was planning to float its plastics unit as a separate company, which led its shares to closed around 6.2 percent higher.

Food wholesaler Booker Group ended roughly 7.8 percent higher after the London-listed company announced a rise in second-quarter sales.

Merger talk in the industrials sector led Sulzer shares to close around 8.9 percent up. The Swiss company confirmed it was in discussions with Dresser-Rand regarding a potential deal.

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