World stocks jump on Fed pledge

Milan - World stock markets shot higher Friday after the Federal Reserve met investor expectations by giving the green light to big asset purchases to boost the U.S. economy.

"'What wasn't expected-and explains the particularly exuberant reaction by markets-was the open-ended nature of the latest plan, with the U.S. committing to buy bonds until the economy improves.," said David Jones, IG chief market strategist. "'All of this has raised hopes of providing a shot in the arm for the global economy."

European stocks surged. Britain's FTSE 100 closed up 1.64 percent to 5,915.55. Germany's DAX gained 1.39 percent to 7,412.13 and France's CAC-40 added 2.27 percent to 3,581.58.

And Wall Street opened higher, on track to record one of the best weeks since June. The Dow Jones industrial average was up 54 points to 13,594, the Standard & Poor's 500 was up eight to 1,468 and the Nasdaq composite was up 34 to 3,190.

The euro currency edged higher to $1.3142 from $1.2985 late Thursday in New York. The dollar rose to 78.08 yen from 77.45 yen.

"'European markets have soared today as investors gorged themselves on the prospect of unlimited free cash from the Federal Reserve over the coming months as well as central banks around the world," said Michael Hewson, senior market analyst at CMC Markets, who said he expects the European Central Bank to follow suit.

But he warned that the rising euro will damage European exports. "'As such, expect the ECB to look at easing monetary conditions further into the end of the year to counter yesterday's actions by the Fed," Hewson said.