European stock markets rallied in the wake of the United States Federal Reserve's shock decision to maintain the size of its huge economic stimulus programme.
London's FTSE-100 Index climbed 1%, up 66.6 points at 6625.4, after Fed chairman Ben Bernanke stunned markets by revealing it will continue pumping $85 billion dollars (£53bn) a month into the world's biggest economy.
European markets also advanced, with Germany's Dax and the Cac 40 in Paris making gains after the Fed said America is not yet ready to be weaned off its money-printing drive.
Markets had widely been expecting the central bank to begin tapering quantitative easing with a $10bn reduction in monthly asset purchases, and shares rose as traders reacted to more money washing around the global economy. The vast money-printing drive aims to boost the value of assets, lower the cost of borrowing and encourage businesses and households to spend.
But after recording strong overnight gains immediately after the announcement, the Dow Jones Industrial Average retreated in early trade as Wall Street re-opened.
The pound retreated from a new nine-month high, to fall to 1.60 US dollars, and was down strongly against the euro to 1.19.
An unexpected fall in UK retail sales last month - down 0.9% between July and August - dampened enthusiasm for sterling. The Office for National Statistics said the main decline came in the food sector, where sales fell 2.7%, reversing a 2.7% gain seen in July that was spurred on by the heatwave. Overall, sales volumes were still up 2.1% year-on-year.
Miners and financial stocks led the FTSE 100 charge, with Randgold Resources and Aberdeen Asset Management at the top of the risers board after rising 363p to 4841p and 23.5p to 390.8p respectively.
Online fashion retailer ASOS pleased investors by saying full-year profits were set to "marginally" beat forecasts after notching up a 47% sales hike in its final quarter. Shares jumped 13%, or 636p to 5469p.
Cash-and-carry chain Booker was also enjoying a share surge - up 3p to 136.6p - as it said interim sales rose 2.3% after its wholesale customers received a boost from warmer summer weather.
The group added its recently acquired Makro business was showing progress on its turnaround, with improved sales declines.
Fellow second tier stock Premier Farnell fell 0.6p to 228.1p despite the electronic components distributor seeing a 19.8% rise in interim profits to £38.1m.
Other big risers on the FTSE 100 were Fresnillo 61p higher to 1069p and Petrofac up 63p to 1412p.
The biggest fallers on the FTSE-100 were Johnson Matthey down 42p to 2852p, easyJet 16p lower to 1294p, G4S 2.5p weaker to 250p and Rexam down 3.9p to 491.6p.
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