European stock markets traded firmly higher on Thursday, keying off solid gains in the U.S. after Federal Reserve Chairwoman Janet Yellen signaled she was in no hurry to raise interest rates.

The Stoxx Europe 600 index gained 0.7% to 348.48, after moving in tight ranges for most of the week.

Germany's DAX 30 index climbed back above the 10,000 mark for the first time since June 11, higher by 0.8% at 10,004.59. The U.K.'s FTSE 100 index advanced 0.7% to 6,824.98, while France's CAC 40 index climbed 0.7% to 4,562.06.

The solid moves came after U.S. Fed chief Janet Yellen after the European close on Wednesday said there would be "considerable time" between when the bond taper ends and rate hikes begin. She also said the central bank wasn't concerned with the stock market currently trading around record highs.

All three major U.S. benchmarks closed in positive territory after the comments.

Back in Europe, Rolls-Royce Holdings PLC climbed to the top of the pan-European index. The engine maker rallied 5.7% after it announced a 1 billion pound ($1.7 billion) stock-buyback program and ruled out any major takeovers.

On a more downbeat note, shares of Hennes & Mauritz AB (HNNMY) slipped 0.6% after Deutsche Bank cut the Swedish fashion retailer to hold from buy, with the analysts saying shares currently trade at "full price".

In the same vein, shares of Air France-KLM SA gave up 1.5% after UBS slashed its rating on the airline to sell from neutral, arguing that a number of factors that are beyond the company's control will weigh on the results. UBS mentioned the recent spike in oil prices due to sectarian violence in Iraq as one of the issues.

Outside financial news, Spain faced a tough match against Chile in the soccer World Cup Wednesday. The defending champion lost 2-0 and was eliminated from the tournament after only two games.