Stock markets across the world stormed to record highs today as traders bought into a so-called Santa rally, triggered by progress in America towards the Republicans' tax reforms.
Congress is expected to vote on the plan – which would slash the rate of corporate income tax from 35 per cent to 21 per cent – as soon as tomorrow.
"The Santa rally is well and truly on," said IG's Josh Mahony as shares in Asia and Europe followed on from a pre-Christmas boom sparked in New York at the end of last week.
The MSCI World index, which tracks stocks around the globe, struck an all-time record high after the Nikkei gained 1.6 per cent, while in Europe the German Dax was also up 1.6 per cent and the French Cac rose 1.3 per cent. In London the FTSE was also up, climbing 0.6 per cent despite being held back by a strengthening pound.
European stocks were also buoyed by growing expectations that German leaders will finally agree a coalition deal, preventing the need for fresh elections in the Eurozone's biggest economy.
Across the pond major US indexes also jumped to historic highs. The Dow Jones closed up 0.57 per cent at 24,792.2, the S&P up 0.54 per cent at 2,690.16 and the tech-heavy Nasdaq up 0.84 per cent at 6,994.76.
"Markets are getting an early Christmas present as what you could call the Santa rally has started," said Axitrader analyst James Hughes.
"Hopes of a successful route through both the House and the Senate for the US tax reform bill have cheered equity markets across the board and seen Wall Street add some significant gains."
However, Hughes warned that last-minute amendments to the bill could rattle investors. The jump in equities has come amid thin trading volumes, which leave markets vulnerable to a sharp turn in sentiment.
The existence of Santa rallies is a widely-held belief on trading floors, with historical data showing that December usually proves to be the most bullish month of the year.