EUROPE MARKETS: German DAX At Record As Europe Stocks Rally

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- Germany's DAX 30 benchmark traded at a record and a broad Europe benchmark was on track for its highest close in more than five years Thursday after the U.S. Federal Reserve, in a surprise move, didn't announce a cut in its monthly asset purchases.

The Stoxx Europe 600 index gained 0.5% to 314.79, while Germany's DAX 30 index added 0.5% to 8,675.20, trading at an all-time high.

The U.K.'s FTSE 100 index added 1.1% to 6,633.09 and France's CAC 40 index climbed 0.6% to 4,193.58.

U.S. stocks traded mostly higher after closing at record highs on Wednesday.

The solid gains came after the U.S. Fed late Wednesday abstained from reducing its $85-billion-a-month asset purchases and said it would wait for more evidence of economic progress. The central bank cited rising mortgage rates and reduced federal spending as headwinds that "could slow the pace of improvement in the economy."

"This move by the Fed comes as a shock to investors who had positioned themselves and effectively accepted that Chairman Bernanke would start the reduction," said Alex Conroy, financial sales trader at Spreadex, in a note.

Fed Chairman Ben Bernanke said that the central bank might still scale back its bond buys before the end of the year, but that it will depend on whether growth and the pace of hiring show greater strength.

The decision to postpone the taper also boosted gold and silver prices, triggering a rally for Europe's precious miners. Polymetal International PLC surged 9.3%, Randgold Resources Ltd. jumped 7.6% and Fresnillo PLC gained 5.8%.

Banks also gained, with Intesa Sanpaolo SpA up 3.6% in Milan, Standard Chartered PLC climbing 3.7% in London and Deutsche Bank AG (DB) ticking 1.1% higher in Frankfurt.

Among other notable movers in Europe on Thursday, shares of Roche Holding AG gained 0.7%. A report in Dealreporter said the Swiss drug maker was eyeing a takeover of U.S.-listed BioMarin Pharmaceutical Inc. (BMRN). A representative from Roche declined to comment on the report, while BioMarin wasn't immediately available for comments.

Also in Zurich, shares of Cie. Financière Richemont SA rose 2.1% and Swatch Group AG picked up 1.5% after data showed Swiss watch exports rose 0.5% in August.

Shares of Scania AB climbed 3.1% after the Swedish truck maker said it didn't see the normal seasonal downturn in European order bookings in July and August.

Shares of Airbus-parent European Aeronautic Defence & Space Co. added 1.8% in Paris after Deutsche Lufthansa AG said it will order 59 long-range jetliners from Airbus and Boeing Co. (BA). Lufthansa shares were down 0.4%.

The broader markets shook off downbeat retail data from the U.K., showing sales dropped 0.9% in August after a solid 1.1% rise in July.

Meanwhile, a monthly survey from the Confederation of British Industry showed U.K. manufacturers are the most upbeat in 18 years.

The data calendar was heavy in the U.S., starting with jobless claims showing 309,000 Americans filed for jobless claims last week, which beat analysts expectations.

The Philadelphia Fed's manufacturing index jumped to a reading of 22.3 in September from 9.3 in August, while the leading economic index for the U.S. rose 0.7% in August to 96.6.

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