Britain's FTSE rebounds after Fed pledges low rates
* FTSE 100 up 1 percent
* Rally pushes index through resistance at 200 day MA
* Astrazeneca among top gainers after acquisition
By Toni Vorobyova
LONDON, Dec 19 (Reuters) - Britain's FTSE 100 followed other global stock markets higher on Thursday after the U.S. Federal Reserve sugar-coated a surprise first cut in bond-buying with a promise to keep interest rates low for a long time to come.
That eased the impact of the long-expected but oft-delayed $10 billion cut in its monthly asset purchases, the so-called quantitative easing which has kept bond yields low and pushed investor cash into equities.
Those purchases remain at a staggering $75 billion a month and the market also found reassurance in the vote of confidence in the economy that the decision implied. There was also relief at the removal of policy uncertainty.
"We can argue that somehow the market had already priced in a tapering, but what is more crucial is that you have coupled with the Fed tapering the stimulus you have also the fact that rates are going to stay lower for a long period. This is really supportive for the equity market," said Stephane Ekolo, chief European strategist at Market Securities.
"If globally the economy is improving then that's good ... I think we might have a year end rally (in equities)."
The FTSE 100 - whose companies make around a quarter of their sales in the United States - was up 67.47 points, or 1.0 percent, at 6,559.55 points by 0821 GMT, having broken above key technical resistance at the 200-day moving average.
The British blue-chip index was on track for its first weekly gain in seven weeks, snapping its longest down run since 2008. However, it is still down 1.4 percent since the start of the month and must thus rally further if it is to avoid posting its first December fall in over a decade.
Volumes rebounded as investors who had stayed away in the face of uncertainty over whether the Fed would taper or not returned to the market. Half an hour into the session, activity was already at 8.3 percent of its 90-day daily average.
Among the top individual risers, AstraZeneca gained 2.7 percent after agreeing to buy agreed to buy Bristol-Myers Squibb's stake in a diabetes joint venture between the two drugmakers for an initial $2.7 billion plus up to $1.4 billion in additional payments.
"Any joint ventures are always fraught with difficulty... they (can) just drag on and become a distraction from the core business, so AstraZeneca taking this and actually making it their own .... going forward it should be a much better situation; they get more control, and it's a big growing sector diabetes," Joe Rundle, head of trading at ETX Capital, said.
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