Stock indices closed higher on the Fed's interest rate hike. The Fed on Wednesday raised its interest rate to the range 0.25% - 0.50% from 0.00% - 0.25% as widely expected by analysts. All Federal Open Market Committee (FOMC) members voted for the interest rate hike. The Fed repeated that further interest rate hikes will be gradual.

Meanwhile, the economic data from Eurozone was negative. German Ifo Institute released its business confidence figures for Germany on Thursday. German business confidence index declines to 108.7 in December from 109.0 in November. Analysts had expected the index to remain unchanged at 109.0.

"The economic situation could hardly be better in the run-up to Christmas," Ifo President Hans-Werner Sinn said.

The European Central Bank (ECB) released its economic bulletin on Thursday. The central bank noted that the economic recovery in the Eurozone is expected to continue, supported by domestic demand.

The Office for National Statistics released its retail sales data for the U.K. on Thursday. Retail sales in the U.K. climbed 1.7% in November, exceeding expectations for a 0.5% rise, after a 0.5% decline in October. October's figure was revised up from a 0.6% decrease.

The increase was driven by retailers' promotions at the end of the month.

Food sales were up 0.8% in November, sales at department stores rose 4.3%, while household goods sales climbed 4.1%.

On a yearly basis, retail sales in the U.K. jumped 5.0% in November, beating forecasts of 3.0% increase, after a 4.2% rise in October. October's figure was revised up from a 3.8% gain.

The Confederation of British Industry (CBI) released its industrial order books balance on Thursday. The CBI industrial order books balance rose to -7 in December from -11% in November.

The index increased in December as export orders improved.

"Manufacturers are still having a tough time of it with output slipping and exports remaining a weak spot in spite of an improvement at the end of the year. But there is a pick-up in orders from previous months which could be a sign of light at the end of the tunnel," the CBI director of economics Rain Newton-Smith said.

Indexes on the close:

Name Price Change Change %

FTSE 100 6,102.54 +41.35 +0.68%

DAX 10,738.12 +268.86 +2.57%

CAC 40 4,677.54 +52.87 +1.14%