Europe Closes Higher as US Rallies

European shares closed higher on Thursday following dovish comments from U.S. Federal Reserve Chairman Ben Bernanke, and renewed optimism on the economic outlook in Japan and China.

The pan-European FTSEurofirst 300 Index provisionally closed up 0.6 percent at 1,197.03 points, following comments by Bernanke that stressed the central bank intended to maintain its stimulus measures in the near-term, even if unemployment fell to the targeted 6.5 percent.

Britain's FTSE 100 closed up 0.7 percent, with the German DAX and French CAC 40 also closing higher, up 1.2 percent and 0.8 percent respectively.

Bernanke's speech has sparked a sharp relief rally across global markets. U.S. stocks were sharply higher across the board on Thursday, with all key S&P sectors in positive territory.

The Dow Jones Industrial Average rallied above its all-time closing high of 15,409.39 in late morning trade. The blue-chip index's point gain for 2013 is already greater than any year on record. The S&P 500 was higher for a sixth-consecutive session, flirting with its record closing level of 1,669.16.


Meanwhile, U.S., weekly jobless claims rose last week to a seasonally adjusted 360,000, according to a government report on Thursday, above expectations for a reading of 340,000.

(Read More: Bernanke Says Economy Still Needs Fed Stimulus)

Asian stocks also rallied on Thursday, helped by the Bank of Japan upgrading its economic assessment of the country. It kept monetary policy steady at the conclusion of a two-day meeting. The Shanghai Composite finished higher by 3.17 percent at the close, hitting a three-week high on hopes that the People's Bank of China may ease monetary policy in order to boost growth, after Wednesday's dismal trade numbers.

(Read More: Asia Enjoys Relief Rally Over Fed Stimulus Hopes)

Back in Europe, the basic resources sector outperformed, due to its strong exposure to China. The sector index pared Wednesday's losses, closing provisionally 4.10 percent higher.

Portugal's PSI 20 Index closed provisionally down 2.01 percent, making it the worst major European performer, after President Anibal Cavaco Silva threw the bailed-out country into disarray by rejecting a plan aimed at healing a government rift. He ignited what critics called a "time bomb" by calling for early elections next year.