Morning Markets: Fed rate pledge boosts indices

A decision by the US Federal Reserve to keep interest rates on hold boosted sentiment in London this morning.

The FTSE advanced 13.4 points, or 0.2%, to 5,633.82, helped largely by early gains for miners.

Yesterday, the Federal Reserve vowed once again to keep US rates at rock-bottom levels for "an extended period" while it waits to measure the strength and sustainability of the economic recovery.

In London, Rio Tinto rose 1.1% to £37.41 after agreeing a new distribution deal with two of Japan's largest steel makers.

Elsewhere, Xstrata advanced 1.3% to £11.80, Fresnillo gained 1.7% to 840p and Eurasian Natural Resources rose by 1.4% to £11.83.

In Asia, Japanese stocks surged to a two-month high following the Fed's decision and a move by the Bank of Japan to extend its lending programme to banks. The Nikkei 225 ended 1.2% up at 10,846.98.

In New York, the Dow advanced 43 points, or 0.41%, to close on 10,685. The Fed also said it expects inflation to remain under control and the number of unemployed to drop.