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European Markets Close Higher

European markets ended mostly higher on Thursday, with the Federal Reserve's dovish policy stance and expectations of more stimulus from global central banks lifting stock prices and pushing the region's key indices higher.

The Bank of England left its interest rate unchanged today. Geopolitical tensions pushed crude oil prices higher.

Investors were also reacting to the surge in oil prices on news about the downing of a U.S. drone in international airspace over the Strait of Hormuz. Iran's Revolutionary Guard force said it had shot down an "intruding American spy drone".

U.S. officials said the drone was in international territory at the time.

The pan European Stoxx 600 moved up 0.36%. Among the major indices in Europe, Germany's DAX gained 0.38%, France's CAC 40 advanced 0.31% and the U.K.'s FTSE 100 ended 0.28% up.

Iceland, Ireland, Italy, Netherlands, Norway, Russia and Sweden also ended on a positive note.

Bank stocks were mostly weak. Deutsche Bank ended lower by about 2.6% on reports the bank is facing an FBI investigation over possible money-laundering.

Infineon surged up 3.6%. SAP, Deutsche Post, Fresenius and Volkswagen also posted solid gains.

In France, Technip, STMicroElectronics, Capgemini, Schneider Electric, Vivendi, Valeo and Louis Vuitton ended stronger by 1 to 3.4%.

Credit Agricole, BNP Paribas, Carrefour, Publicis Groupe and Societe Generale lost 1 to 3%.

Among U.K. stocks, Fresnillo gained more than 5%. IAG and EasyJet gained about 3% and 2.8%, respectively. Johnson Matthey, St James Place, BHP Group, Flutter Entertainment, CRH, Ashtead Group and Hargreaves Lansdown gained 2 to 2.5%.

Carnival plunged 12% after the company cut its full-year profit forecast. Dixons Carphone lost more than 5% after warning on fiscal 2020 headline profit. The company reported a loss in fiscal 2019.

The Bank of England maintained its interest rate and quantitative easing, as widely expected, but downgraded growth projection for the second quarter.

The BOE's Monetary Policy Committee, led by Governor Mark Carney, unanimously decided to hold the bank rate at 0.75%, the bank said in a statement.

The stock of corporate bond purchases was kept at GBP 10 billion and that of government bond purchases at GBP 435 billion.

The bank downgraded its growth outlook for the second quarter to zero from 0.2% as the factors that underpinned first quarter growth faded.

Underlying growth appeared to have weakened slightly in the first half of the year relative to 2018 to a rate a little below its potential, the bank noted.

The bank forecast inflation to fall below the 2% target this year.

The central bank said the monetary policy response to Brexit will not be automatic and could be in either direction. The MPC said it will always act to achieve the inflation target.

Preliminary figures from the European Commission showed Eurozone consumer confidence dropped sharply in June, almost entirely erasing May's gain, amid rising concerns regarding the weaker outlook for the global economy.

The flash consumer confidence index declined to -7.2 from -6.5 in May. Economists had expected the index to remain unchanged. In April, the reading was -7.3.

The consumer confidence index for the EU also shed 0.7 points in June to reach -6.9. Both the Eurozone and the EU confidence reading remained above their long-term averages of -10.7 and -10, respectively.

In other economic news from Europe, the U.K.'s retail sales fell for the second straight month in May, declining by 0.5% month-on-month.

Switzerland's exports fell for the third month in May, while imports were up, data from the Federal Customs Administration showed. Exports were down 1.2% in the month, following a 0.3% drop in April, which was revised from 0.6%.

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