European stocks close: stocks closed higher on China's interest rate decision

Stock indices closed higher on China's interest rate decision. The People's Bank of China (PBoC) announced on Friday that it lowered the one-year benchmark bank lending rate by 25 basis points to 4.35%. It was the sixth interest rate cut since last November.

The central bank hopes with this decision to support the country's economy.

The interest rate cut would be effective from October 24.

Meanwhile, the economic data from the Eurozone was mainly positive. Markit Economics released its preliminary manufacturing purchasing managers' index (PMI) for the Eurozone on Friday. Eurozone's preliminary manufacturing PMI remained unchanged 52.0 in October, beating expectations for a decline to 51.7.

Eurozone's preliminary services PMI rose to 54.2 in October from 53.7 in September. Analysts had expected the index to decrease to 53.5.

Markit's Chief Economist Chris Williamson said that Eurozone's economy "picked up some momentum in October".

"The PMI remains at a level signalling a modest 0.4% quarterly rise in GDP, suggesting the region will struggle to attain more than 1.5% overall growth in 2015. The rate of job creation, although on the rise, remains insufficient to make serious headway into reducing unemployment," he added.

Germany's preliminary manufacturing PMI declined to 51.6 in October from 52.3 in September, in line with expectations.

Germany's preliminary services PMI was up to 55.2 in October from 54.1 in September. Analysts had expected index to decline to 53.9.

Markit's economist Oliver Kolodseike noted that the German economy was driven by the services sector.

France's preliminary manufacturing PMI rose to 50.7 in October from 50.6 in September, beating forecasts of a fall to 50.2.

France's preliminary services PMI increased to 52.3 in October from 51.9 in September. Analysts had expected the index to decline to 51.6.

Indexes on the close:

Name Price Change Change %

FTSE 100 6,444.08 +67.80 +1.06 %

DAX 10,794.54 +302.57 +2.88 %

CAC 40 4,923.64 +121.46 +2.53 %