Stock indices closed higher on a European Central Bank's interest rate cut. The European Central Bank (ECB) lowered its interest rate to 0.05% from 0.15%. The central bank also cut its deposit facility rate to -0.20% from -0.10% and its marginal lending rate to 0.30% from 0.40%.

The ECB President Mario Draghi said the central bank will start buying asset-backed securities, including covered bonds. Details of the asset-backed securities (ABS) program will be announced later.

German factory orders rose 4.6% in July, exceeding expectations for a 1.6% increase, after a 2.7% decline in June. June's figure was revised up from a 3.2% fall.

The Bank of England (BoE) kept its interest rates unchanged at 0.5% and its asset purchase program unchanged at £375 billion.

Bilfinger SE shares dropped 9.4% after the company lowered its full-year profit forecast.

Indexes on the close:

Name Price Change Change %

FTSE 100 6,877.97 +4.39 +0.06%

DAX 9,724.26 +97.77 +1.02%

CAC 40 4,494.94 +73.07 +1.65%