European stocks rally after Fed keeps stimulus intact

European stock markets soared on Thursday, joining a global rally as investors welcomed the US Federal Reserve's surprise decision to keep its vast stimulus policy unchanged, dealers said. London's benchmark FTSE 100 index of top companies won 1.36 percent to 6,648.10 points in morning trade, Frankfurt's DAX 30 gained 1.27 percent to 8,744.73 points and the CAC 40 in Paris rose 1.09 percent to 4,216.06. The euro raced to $1.3569 -- the highest level since early February -- from $1.3516 late in New York on Wednesday. The Federal Reserve decided overnight to hold off from winding down its $85-billion-a-month bond-buying -- known as quantitative easing (QE) -- in a move which confounded market expectations. "With tapering seen as all but certain, frenzy ensued last night when... the Fed held back, causing markets to soar," said Spreadex trader Alex Conroy. "This move by the Fed comes as a shock to investors who had positioned themselves and effectively accepted that Chairman (Ben) Bernanke would start the reduction." The Fed decision fuelled a buying spree on Wall Street, sending the Dow and S&P 500 indices to record highs. Asian equities also rallied, with Hong Kong gaining 1.67 percent, Tokyo 1.80 percent and Sydney 1.10 percent