European stocks close: stocks closed higher on a possible extension of the ECB’s asset buying programme

Stock indices closed higher on comments by the European Central Bank (ECB) President Mario Draghi. He said that the central bank could extend its asset buying programme if needed, adding that the limit on sovereign bond ownership by the central bank will be raised to 33% from 25%.

The ECB lowered its economic growth and inflation forecasts. Eurozone's economy is expected to expand 1.4% in 2015, down from the previous estimate of a 1.5% gain, 1.7% in 2016, down from the previous estimate of a 1.9% rise, and 1.8% in 2017, down from the previous estimate of a 2.0% increase.

Eurozone's inflation is expected to rise 0.1% in 2015, down from the previous estimate of a 0.3% gain, 1.1% in 2016, down from the previous estimate of a 1.5% rise, and 1.7% in 2017, down from the previous estimate of a 1.8% increase.

The central bank kept its monetary unchanged on Thursday. The interest rate remained unchanged at 0.05%. This decision was widely expected by analysts.

Meanwhile, the economic from the Eurozone was mostly positive. Retail sales in the Eurozone rose 0.4% in July, missing expectations for a 0.6% rise, after a 0.2% decrease in June. June's figure was revised up from a 0.6% drop.

The increase was driven by higher gasoline sales, which rose 0.8% in July.

On a yearly basis, retail sales in the Eurozone climbed 2.7% in July, exceeding forecasts of a 2.0% gain, after a 1.7% increase in June. June's figure was revised up from a 1.2% rise.

The annual rise was driven by non-food sales, gasoline sales, and food, drinks and tobacco and non-food sales.

Markit Economics released final services purchasing managers' index (PMI) for the Eurozone on Thursday. Eurozone's final services purchasing managers' index (PMI) increased to 54.4 in August from 54.0 in July, up from the preliminary reading of 54.3.

The index was driven by rises in new business and business activity.

Markit's and the Chartered Institute of Purchasing & Supply's services purchasing managers' index (PMI) for the U.K. fell to 55.6 in August from 57.4 in July, missing expectations for a rise to 57.6. It was the lowest level since May 2013.

The decline was partly driven by a slower growth in business since April 2013.

Indexes on the close:

Name Price Change Change %

FTSE 100 6,194.1 +110.79 +1.82 %

DAX 10,317.84 +269.79 +2.68 %

CAC 40 4,653.79 +98.87 +2.17 %