Europe shares hit 5-year high as Fed sticks to stimulus

* FTSEurofirst 300 up 0.6 pct, Euro STOXX 50 (Zurich: ^STOXX50E - news) up 0.9 pct

* Cyclical, real estate stocks lead rally; defensives lag

* Portuguese stocks buck trend after S&P downgrade warning

By Blaise Robinson

PARIS, Sept 19 (Reuters) - European shares rose on Thursday, with one benchmark index rising to a five-year high after the U.S. Federal Reserve surprised the market by delaying plans to scale back its stimulus measures.

Cyclicals and real estate shares led the rally, with global miner Anglo American (LSE: AAL.L - news) up 3.7 percent and Unibail-Rodamco , Europe's biggest property group, up 4.8 percent.

Gold miners also rallied, tracking a sharp rise in the precious metal as the U.S. dollar fell. Randgold climbed 8.1 percent and Fresnillo (Other OTC: FNLPF - news) added 6 percent.

After European markets closed on Wednesday, the Fed said it would keep buying $85 billion in assets per month, countering expectations that it would start trimming the programme by at least $5 billion to $10 billion.

The Fed's quantitative easing programme has been a major factor behind the global equity market rally of the past year.

The FTSEurofirst 300 index of top European shares ended 0.6 percent higher at 1,265.95 points, a level not seen since mid-2008, while the euro zone's blue-chip Euro STOXX 50 index rose 0.9 percent, to 2,936.20 points, a level not seen since mid-2011.

"The Fed's decision not to taper doesn't change the scenario, it just delays everything," said Oliver Pfeil, portfolio manager, global equities, at Deutsche Asset & Wealth Management, which has about 1 trillion euros ($1.35 trillion) in assets under management.

"The market now realises that it will take much longer to unwind quantitative easing, but at the end, economic growth will pick up, so going into cyclical stocks still makes a lot of sense," he said.

Pfeil sees more upside for European shares than U.S. stocks, expecting a snap-back in stock valuation levels as the euro zone emerges from recession.

European shares seen as defensive were lagging on Thursday, with German utility down 1.3 percent and Swiss pharma group Novartis (Berlin: NOT.BE - news) down 0.6 percent, as investors turned to stocks more strongly influenced by the economic cycle.

The Fed also cut its projection for 2013 economic growth to a 2.0 percent to 2.3 percent range from a June estimate of 2.3 percent to 2.6 percent. The downgrade for 2014 was even sharper.

"The Fed's decision not to cut its programme means that the economic environment remains difficult, with the U.S. growth momentum weaker than before the summer," said Estelle Menard, fund manager at Amundi, which has 750 billion euros ($1 trillion) under management.

Around Europe, UK's FTSE 100 (FTSE: ^FTSE - news) index gained 1 percent, Germany's DAX index (Xetra: ^GDAXI - news) added 0.7 percent, and France's CAC 40 rose 0.9 percent.

Portuguese stocks underperformed, with the country's PSI20 benchmark rising only 0.2 percent, after Standard & Poor's put Portugal under warning of a possible credit-rating downgrade while the country's international lenders were in Lisbon discussing its bailout.