Europe Markets

Europe markets close higher on Yellen comments; Credit Agricole up 4.7%; Heineken rises 3.6%

European markets closed higher on Wednesday after Federal Reserve Chair Janet Yellen hinted at a possible rate hike next month.

The pan-European Stoxx 600 closed up 0.34 percent with most sectors and major bourses higher. Banking stocks ended the trading day as the best performer after earnings and monetary policy news. Fed Chair Janet Yellen said in prepared remarks Tuesday that waiting too long to raise interest rates would be "unwise," given the rise in inflation and economic growth.

Credit Agricole posted strong fourth-quarter earnings and its shares moved higher by 4.7 percent on Wednesday. ABN AMRO beat forecasts with its fourth-quarter earnings too, with higher operating income and profit. Its CEO told CNBC that the firm is not considering any mergers or acquisitions. Shares rose over 2.5 percent.

At the top of the European benchmark was Huhtamaki, the global food packaging specialist. Its shares were up by more than 8.7 percent on strong fourth-quarter results.

Brewer Heineken reported Wednesday a 3 percent increase in full-year sales by volume and added that it will meet its medium-term target for operating margin expansion. Shares were higher by more than 3.6 percent on Wednesday. Danone announced a cost-cutting plan of 1 billion euros ($1.1 billion) over the next three years, due to changes in Europe and a tough environment in China. Its shares moved slightly lower.

Meanwhile, in the U.S., the Dow Jones industrial average and broader S&P 500 continued higher on Wednesday as equities remained on track to post a 16th record high since the election.

The European Commission has reportedly given a preliminary green light to the troubled Monte dei Paschi to sell its non-performing loans, Reuters reported.

Crude oil stocks rose to its highest level on record on Wednesday. The Russian government said that it expects oil prices to be between $50 and $55 per barrel in 2017.

Brent crude traded at around $55.74 a barrel on Wednesday shortly after the European close, down 0.4 percent, while U.S. crude was around $52.99 a barrel, down 0.39 percent.

However, political uncertainty seems to be scaling up and remains a key factor for investors. Jeroen Dijsselbloem of the Eurogroup said that Greece and its creditors will not reach a deal before a meeting scheduled for next Monday, which increases concerns that Greece may default on its debt again.

Sweden's Riksbank kept its benchmark rate unchanged Wednesday but added that a stronger domestic economy and rising political uncertainty abroad were a threat to its inflation target.

Elsewhere, U.K. unemployment data met analyst forecasts with a rate of 4.8 percent.

Meantime, NATO defense ministers gathering in Brussels are under pressure from the U.S. administration to increase defense spending.

- CNBC's Fred Imbert contributed to this article.

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