Mario Draghi achieved the impossible on Thursday, becoming everything to everyone, when he announced that the European Central Bank will cut back its bond-buying program in April 2017, but simultaneously extended the length of the program to run at a reduced rate until at least the end of December 2017.

The decision drove European markets to a fourth solid day of gains, with the DAX and CAC 40 both touching fresh 2016 highs.

The monetary policy move is a partial victory for those who have opposed the ECB's bond-buying program, or simply hoped to see it cut back, given that monthly asset purchases from April will fall by €20 billion ($21.5 billion) to €60 billion per month.

But it also appeased those investors who might have been anxious over the prospect of the central bank deciding to end its quantitative easing program at the initial expiration date in March.

Thursday's monetary policy action came as the U.K. government's Supreme Court battle over whether the formal exit process from the European Union can begin without parliamentary approval drew to a close.

The court is now set to consider submissions made by both sides and return a verdict, most likely in the new year. The relevance of the decision is reduced, though, since on late Wednesday night lawmakers backed the government's timetable for leaving the EU and agreed to vote in favor of beginning the formal exit before the end of March 2017.

The DAX rose by 1.8% to close at 11,179, while the CAC 40 gained 0.9 % to settle at 4,735.

The FTSE 100 was up by 0.4% at the close, to 6,931, while the FTSE 250 gained 0.3% to 17,676.

The Stoxx Europe 600 index rose by 1.2%, to 352.0, marking a six-month high for the benchmark.

European currencies fell against the dollar during the Thursday session after the divergence of monetary policies came back into full focus, with the ECB carrying out a halfway easing while investors gear up for another hike from the Federal Reserve. The pound sterling dropped by around 150 points to trade back at 1.2550, while the euro also dropped by around 150 points to trade back at 1.0620.

Longer-dated bonds saw yields rise across the continent in response to the ECB's actions, while shorter-dated bonds saw yields fall. The U.K. 10-year yield rose to touch 1.25%, while the German yield was up at 0.37%.

In individual stocks, banks were big gainers for the third day running, topping the leaderboard across continental benchmarks.

In Germany, Deutsche Bank (DB - Get Report) benefited from speculation that large Chinese institutions could be seeking to take a meaningful stake in the financial titan. The stock rose by close to 3%.

But the biggest gainer on the DAX for the session was Commerzbank (CRZBY) , which gained more than 5% for the session.

In France, Societe Generale (SCGLY) was the biggest beneficiary of the ECB's decision on monetary policy and a continued risk-on attitude from investors. The shares were up more than 4% in Paris on Thursday.

In London, banking stocks gained for the day, but they lagged other risers such advertising giant WPP (WPPGY)  and IAG, the airline. The stocks were up by 4.6% and 3.1% respectively at the close.