Europe Closes Higher on ECB, BoE Guidance

European shares rallied to post their biggest one-day jump in 10 weeks on Thursday, after the Bank of England (BoE) and the European Central Bank (ECB) both gave guidance for the first time on the path for future monetary policy.

The pan-European FTSEurofirst 300 Index provisionally closed up 2.4 percent at 1,178.42 (its biggest rise since April), after both central banks kept benchmark rates unchanged at a record low of 0.5 percent, but indicated that monetary policy would continue to be accommodative.

The Bank of England said that if bond yields rose that would weigh on its outlook for growth and suggested that fears among investors of a tightening in policy were not warranted.

ECB President Mario Draghi also provided forward guidance on the future of monetary policy. Draghi explicitly pledged to keep key interest rates at current levels or lower for "an extended period of time." The decision was supported unanimously by the ECB.

Both sterling and euro fell sharply against the dollar.

(Read More: BoE Holds Fire as Carney Reign Begins)

U.S. markets were shut for the Independence Day public holiday, but U.S.stock futures climbed sharply following the news from the ECB and BoE, with the Dow Jones Industrial Average futures pointing to a gain of 184 points, while the S&P 500 futures indicated a 15 point increase.

Meanwhile, the Portuguese PSI 20 closed 3.7 percent higher on Thursday, after closing down 5.2 percent on Wednesday, due to growing political uncertainty. Wednesday's drop followed the resignation of two key ministers from the nation's coalition government.

(Follow Our Live Blog: Markets, Portugal and ECB Decision)

Portugal's Prime Minister Pedro Passos Coelho said on Thursday there was no reason why the government should fall after the government resignations. The country banned short-selling of three bank stocks, Dow Jones reported, as political parties met to try to defuse the crisis.

(Read More: ECB, Not Portugal, Is Main Threat to Euro)

Egypt's EGX index closed up 7.3 percent on Thursday after Egyptian President Mohammed Morsi was ousted by the army, causing widespread celebrations in cities of Cairo and Alexandria.