The biggest winner was GlaxoSmithKline, which rose 4 percent after saying it would combine its consumer health business with Pfizer's in a joint venture with sales of 9.8 billion pounds ($12.41 billion).
Oil and related stocks provided the biggest support to the FTSE 100, with industry heavyweights Shell and BP rising over 1 percent as crude prices bounced back following steep losses on oversupply worries.
Copper also rose on hopes the U.S. central bank would slow the pace of interest rate rise, leading to miners Rio Tinto , Glencore, BHP and Anglo American rising more than 2 percent.
Blue-chip Just Eat rose 1.9 percent as Liberum analysts expressed confidence in the takeaway group's strategy and said a takeover or a go-private deal could be on the cards after calls by a shareholder this week for asset sales.
In the red was postal services group Royal Mail, down 2.4 percent after weak results from FedEx in the U.S. dented sentiment across the post and logistics sector.
After ASOS's profit alert on Monday shook the retail sector, FedEx provided the latest window into the effects of weaker consumer sentiment impacting not only retailers but also companies charged with delivering purchases.
Royal Mail, the century-old UK firm, is set to lose its FTSE 100 status later this week.
On the Brexit front, the government said it would implement plans for a no-deal scenario in full, even as Prime Minister Theresa May is set to bring her divorce deal back to the parliament for a vote in mid-January.
With the March 29 date for departure from the European Union fast approaching, there is still little clarity on how things will pan out, with factions pressing for different options for future ties, leaving without a deal or remaining in the EU.
But investors shrugged off those worries for the time being and concentrated instead on the Fed decision.
"Despite the negative sentiment, it's unwise to bet on the direction of the stock market in the short term, as it's prone to defy expectations, sometimes for the better, sometimes for the worse," Hargreaves Lansdown analyst Laith Khalaf said.
"We’re unlikely to see the gloom lift in January. Brexit looks set to reach a parliamentary crescendo, and a swathe of trading updates from the UK high street isn’t likely to lighten the mood."
Flybe has roughly doubled in market value since Sky News broke the news on the takeover talks in late November - but the struggling airline has still sunk 43 percent this year as profit warnings took their toll on the share price.
Small-cap Gulf Marine Services plunged 74.7 percent after the support vessels maker said it expects to be in breach of some banking covenants at the end of this year.
AIM-listed YU Group, a gas and electricity supplier, fell 27 percent to an all-time low after it said the UK's financial watchdog was planning to investigate some of the company's announcements from this year. ($1 = 0.7896 pounds) (Reporting by Muvija M and Shashwat Awasthi in Bengaluru, Editing by Helen Reid/Mark Heinrich)
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)