The FTSE 100 surged on Tuesday to close above 6,400 for the first time in over five years helped by solid company reports and supportive central bank comments.
Financials and mining stocks added the most points to the FTSE 100, with results from other sectors meeting or beating expectations.
Mining Company Xstrata gained 7.2 per cent before it merges with Glencore, which also gained 6.2 per cent after posting results. Amongst other winners was John Wood Group that advanced 7.9 per cent, as the energy services firm posted impressive results, including a 35 per cent jump in profits. The results reflect well on global growth trends, which many FTSE 100 stocks are also highly sensitive to.
Even though the economy has had a difficult time, generally Corporate earnings have generally done well, hence equity markets are seeing gains.
The rally on global stock markets comes as the European Central Bank, the Bank of England and the Bank of Japan are all expected to stick to steady monetary policy at their meetings this week, following on from reassurances by U.S. Federal Reserve officials that their aggressive stimulus programme will be maintained for the immediate future.
The FTSE 100 closed up 86.32 points, or 1.4 per cent, at 6,431.95, its highest close since January 2008. Indexes across Europe also hit multi-year highs.
The Dow Jones Industrial Average closed at record levels, as stock market investors bet that major central banks will continue easing measures to boost economic activity. In addition China is on course to maintain its economic growth target for this year. Looking forward, sentiment could get further support from data this week as the Beige Book, a survey of regional economic conditions compiled by the Federal Reserve, will probably show that employment continued to grow ahead of Friday’s jobs report.
Japanese stocks extended recent gains with the Nikkei 225 Stock Average up 0.3 per cent to a new four-and-a-half-year high, after finance minister Taro Aso said he expected Haruhiko Kuroda, the nominee for Bank of Japan governor, to handle monetary policy to shore up a sluggish economy.
The FTSE All-World equity index was up 0.9 per cent after the Asia-Pacific region added 0.5 per cent and as the FTSE Eurofirst 300 saw a gain of 1.2 per cent.
Meanwhile on the currency markets the euro remains steady at $1.3050, though only 100 pips or so above 12-week lows.
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