European equities closed higher on Thursday, as investors reacted to fresh economic data and auto stocks posted strong gains.

The pan-European Euro Stoxx 600 Index (^STOXX) closed over 1 percent higher as new figures late Wednesday showed impressive gains in auto sales for the European market.

This helped major car manufacturers post gains on Thursday. Heavily weighted companies like Renault (Euronext Paris: RNO-FR) and BMW (XETRA:BMW-DE) both closed over 2 percent higher and helped the wider benchmarks.

London’s FTSE 100 (FTSE International: .FTSE) closed around 1.1 percent higher, the French CAC (Euronext Paris: .FCHI) ended around 1.4 percent higher, while the DAX (^GDAXI) closed just over 1 percent higher.

Other new data on Thursday showed that German exports had recovered in February, and that industrial output had also edged higher.

Meanwhile, London-listed HSBC (London Stock Exchange: HSBA-GB) shares closed almost 3 percent higher, even though the U.K. bank has been ordered to post 1 billion euros in bail to cover a potential fine following allegations that it helped customers dodge tax.

Read More France sets $ 1.1B bail in HSBC Swiss tax probe

Plus, clothing brand Burberry (London Stock Exchange: BRBY-GB) saw its shares rise by around 3 percent after speculation that it could be on the receiving end of a takeover bid from the U.S.

Investors also eyed U.S. weekly jobless claims on Thursday . U.S. stocks traded in a narrow range, as investors digested earnings reports and looked for more signals on the timing of an interest rate hike.

Elsewhere, Greece made a 450 million euro payment to the International Monetary Fund as part of its bailout agreement with its international debt supervisors.

Greek Prime Minister Alexis Tsipras continued his visit to Russian President Vladimir Putin on Thursday. Russia is considering giving Greece funds based on future profits Athens would earn from shipping Russian gas to Europe , as part of an extension of the Turkish Stream gas pipeline project, according to Reuters.

Greek shares ended around 1 percent higher on Thursday.

Read More IMF’s Lagarde: ‘Dedicated’ to Greek reform process

In other news, the Bank of England’s Monetary Policy Committee kept monetary policy unchanged on Thursday morning, as expected.

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