Markets surged today as investors took comfort in comments from the US Federal Reserve that policy makers in the world's biggest economy will be patient in their approach to raising interest rates.

The outcome of the latest Fed meeting helped reassure traders following a turbulent period, lifting the FTSE 100 Index by 2%, or 129.5 points, to 6466.

Bourses in Europe also performed strongly, with France's Cac 40 and Germany's Dax each up by around 3%.

It came after the Fed meeting highlighted optimism over America's economic performance but the central bank's chair, Janet Yellen, also appeared to rule out an interest rate rise in the first quarter of the year.

Her message boosted Wall Street in the previous session, with the bullish sentiment spreading across the Atlantic today and strengthened by promising US data on the economy and jobs.

New York's Dow Jones Industrial Average was again up, by more than 1%, at the time of the close in London today.

Market confidence was also boosted by some signs of stabilisation in the Russian rouble and oil, though the price of a barrel of Brent crude slipped back from a high of more than 63 US dollars to around 60 US dollars.

On currency markets, the Fed's patient approach to rate rises and a strong set of UK retail sales figures meant the pound rose by a cent against the greenback to just under 1.57 US dollars.

UK sales volumes grew by 1.6% month on month as retailers stepped up their pre-Christmas offers, particularly on Black Friday, to achieve the biggest increase since a 2.7% boom in December last year.

Sterling was also a cent higher versus the single currency at over 1.27 euros.

The Russian rouble was trading at about 61 roubles a dollar, slightly lower than its previous session but better than the historic low of 80 this week.

The low-key performance came despite President Vladimir Putin's pledge to fix Russia's economic woes within two years, including through a vow to diversify the gas-dependent economy.

There was more activity in Russia's benchmark MICEX index, which rallied by 6% at one stage.

In stocks, British Airways owner International Airlines Group was ahead as it disclosed that it had made an approach to buy Ireland's Aer Lingus, but has been rebuffed. IAG shares climbed 4%, or 19.9p, to 463.5p.

Semi-conductor firm ARM Holdings was one of those to benefit from the Wall Street rally as the designer of technology used in Apple products improved by 5% or 45.5p to 975.5p after a strong session for Nasdaq-listed stocks.

Other big risers - on a day when only four stocks fell - included hotel operator InterContinental Hotels amid speculation that it could be a £7 billion takeover target. Shares rose 89p to 2574p.

The biggest risers in the FTSE 100 Index were Old Mutual up 10.2p to 189.9p, SABMiller up 178.5p to 3374.5p, Aberdeen Asset Management up 22.8p to 431.4p and IMI up 63p to 1237p.

The biggest fallers in the FTSE 100 Index were Coca-Cola HBC down 20p to 1222p, Glencore down 2.4p to 290p, United Utilities down 3.5p to 914.5p and BT down 1p to 400.8p.