DAX: 2,559.42 (+24.98)

German shares ended trade over half a percentage point higher after the Bundesbank decided to cut its main money market interest rate, the repo, by a larger-than-expected 30 basis points.

The move to cut the repo rate to an historically-low 3 per cent from 3.30 per cent took the market by surprise, particularly as it came in the wake of Wednesday's release of an unexpectedly strong Ifo business climate index for July.

CAC-40: 2,026.54 (+17.12)

Shares in Paris closed with sharp gains, cheered by a surprise interest rate cut by the Bank of France, which followed an equally unexpected easing by the Bundesbank.

Volume was a solid 4.29 billion francs.

Mibtel: 9,714 (+216)

Italian shares jumped up at the close of business in thin trade, lifted by the German rate cut. Italy's agro-industry and chemical giant Montedison SpA returned to the limelight as its shares rose sharply with analysts saying the stock was now a good short-term investment after recent share stake sales.