A trader monitors the screen on a trading floor in London.

London - Britain's top share index bounced back in early trading on Thursday, with the US central bank's decision to delay a reduction in its monetary stimulus boosting investors' appetite for riskier assets.

The FTSE 100 index tracked a rally in global equities after the US Federal Reserve surprised markets late on Wednesday by saying it wanted to wait for more evidence of solid economic growth before trimming its bond purchases, which have helped equity markets across the globe to set new highs.

“I think they've chosen the past of least regret... it's very unlikely that in 6 months time the Fed will regret having waited a few more months to do tapering, but had they done it now, it's possible that they'd have looked back and thought that it was the wrong thing to do,” Garry Evans, global head of equity strategy at HSBC, said.

At 12:21 SA time, the blue chip British stock index was up 94.76 points, or 1.5 percent, at 6,653.67.

The index is up nearly 13 percent this year.

The FTSE 100 remains 2.8 percent off of 13 year highs set in May, just before Fed Chairman Ben Bernanke first indicated that tapering was set to occur later in the year.

A small majority of analysts polled by Reuters believe tapering is still set to occur later this year, in December.

Randgold Resources and Fresnillo were among top gainers, up 7.3 percent and 5 percent respectively, benefitting as gold traded near a one-week high. Gold is seen as an inflation hedge, and had suffered as expectations grew that the Fed would begin to wind down its stimulus package.

“As long as monetary policy remains loose, it's likely to be positive for equities,” James Butterfill, global equity strategist at Coutts, said.

“Since April, we have seen an outperformance in cyclicals and we believe that's going to continue. Our favourite sectors right now are mining, technology and energy.”

UK miners dominated the list of top gainers not just on the FTSE 100 but also the pan-European FTSEurofirst 300, and the sector helped British stocks outperform their European peers. - Reuters