By Anisha Sircar

(Reuters) -European stocks rose more than 1% on Thursday as an upbeat economic outlook from the U.S. Federal Reserve stoked a rally in global equities, with investors turning to the European Central Bank meeting for its policy update.

The pan-European STOXX 600 eyed its best day in over a week, powered by tech stocks after an upbeat session for Wall Street's tech-heavy Nasdaq. [.N]

The Fed on Wednesday flagged a long-awaited end to its pandemic-era bond purchases in March and signalled as many as three rate hikes in 2022, but delivered an otherwise upbeat economic outlook.

"Inflation worries have been top-of-mind because of so many hot readings, so traders want a lid to be kept on it and are welcoming this hands-on approach from the Federal Reserve," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown (LON:HRGV).

The ECB and the Bank of England are set to hold policy meetings later in the day. ECB policymakers are likely to wind down the bank's 1.85 trillion Pandemic Emergency Purchase Programme, but investors are waiting to gauge how the six-year-old Asset Purchase Programme may pick up the slack for the lost stimulus with rate rises still a while away.

"Europe is grappling with another wave of Delta while bracing itself for a fresh wave of Omicron in January, so it's less likely that the ECB will be aggressive with tightening," said Streeter.

New data showed that euro zone business growth slowed more than expected in December as renewed measures to curb the Omicron coronavirus variant curtailed recovery.

Concerns around the impact of the variant, soaring prices and expectations of tighter monetary policies have kept the STOXX 600 hovering just around 4% below its record high hit in mid-November.

Among individual stocks, Swiss pharma company Novartis AG jumped 4.2% after launching a new share buyback of up to $15 billion to be executed by end-2023.

Airbus SE (OTC:EADSY) rose 2.9% after Australia's Qantas Airways Ltd chose the European planemaker as the preferred supplier to replace its domestic fleet, switching from Boeing (NYSE:BA).

Online fashion retailer Boohoo plunged 16% after delivering a warning on annual profit for the second time in four months.

Shares of EDF (PA:EDF) slumped 13% as the French power giant slashed its core profit goal for this year, after detecting faults at a nuclear power station and shutting down another plant using the same kind of reactors.