THE DOW Jones index closed at its highest-ever level in New York last night, as bullish economic news from both China and the US and signs of stimulus measures and low interest rates from central banks sent investors piling into stocks.
The Dow climbed above the previous peak, set five and a half years ago, before the financial crisis struck, to close 126 points up at 14,254. The previous high, reached in October 2007, was 14,164.
In London, the FTSE 100 rose to 6,432, its highest level in more than five years and a new peak in the period since September 2008’s collapse of Lehman Brothers – generally seen as the tipping point of the financial crisis.
The gains were triggered both by a Chinese pledge to spend extra public funds to hit the country’s 7.5 per cent growth target, and US data showing the country’s service industries were growing at their fastest pace for a year, driven by a recovery in the housing market.
Whispers of steady or yet looser monetary policy from central banks in the US, Europe, Japan and the UK also led to further investment in equities. The Bank of England and European Central Bank are expected to keep interest rates low when they meet tomorrow.
The FTSE 100, which was also boosted by positive corporate results from the likes of Serco, Glencore and Xstrata, remains more than 500 points lower than the 6,950 level it reached in 1999.