European stocks close 1% higher after ECB meeting; Stoxx 600 breaches 500-point level for first time

This is CNBC's live blog covering European markets.

European markets closed higher Thursday as the European Central Bank's updated inflation forecast put the 2024 rally back on track.

The pan-European Stoxx 600 provisionally closed 1.05% higher at 503.45 points after surpassing the key 500 level for the first time during the session.

The European Central Bank held interest rates steady at a record 4%, as it revised its forecast for inflation in 2024 to 2.3% from 2.7%.

It also said euro zone growth would be weaker than previously expected this year, at 0.6%.

Markets, which had already zeroed in on rate cuts beginning in June, took the updated macro forecasts as a further sign for that month.

ECB President Christine Lagarde meanwhile said market pricing "seems to be converging better" with the ECB's own view. 

Thursday's news "all but seals the deal that the bank will start easing policy at its June meeting, provided we don't see a blow up in both inflation and wages in the interim," Matthew Ryan, head of market strategy at Ebury, said. "This is now almost fully priced in by swap markets following today's announcement."

Elsewhere, Asia stocks rose after comments from U.S. Federal Reserve Chair Jerome Powell on Wednesday. He reiterated his stance that while the central bank could start cutting rates, it was "not immediately ready."

U.S. stocks were also higher in morning trade as investors digested the monetary policy outlook.

Europe's Stoxx 600 gained 1.05% Thursday, closing above the psychological level of 500 for the first time ever, as the European Central Bank's latest monetary policy meeting fueled bets on a June rate cut.

Technology stocks rallied 2.26% as health care gained 2.3%.

Germany's DAX and France's CAC 40 were both