Dow smashes through 15,000 mark to a record high and FTSE 100 closes at a five-and-a-half year peak

STOCK markets around the world surged yesterday, as Wall Street hit a record high and the FTSE 100 closed at levels not seen since 2007.

The Dow Jones Industrial Average finished the day at above 15,000 points for the first time in its history, while the S&P 500 also reached a record level and Germany’s Dax became the first major European index to beat 2007’s peak.

Equities have climbed steadily this year, as central banks have pursued historically low interest rates in an effort to get their economies moving. Low bond yields, the possibility of further money printing from central banks, and signs of economic recovery have all sent investors hungry for a return piling into shares.

Yesterday, the Australian central bank became the latest to cut interest rates to record lows, in a bid to counter slowing growth in the country’s mining sector.

Meanwhile, the Eurozone crisis showed tentative signs of easing, with German industrial output rising and Portugal’s government easily raising €3bn (£2.5bn) in the country’s first tranche of 10-year bonds since 2011.

These events sent the Dow rising 87 points to close at 15,056.20, the first time it has closed above the 15,000-point mark after briefly reaching that level on Friday. The S&P rose to 1,625.96, itself an record, while the FTSE 100 closed at 6,557.30, a peak not seen since December 2007.

Meanwhile, Germany’s main index, the Dax, closed at 8,181.78 to beat the record set on 16 July 2007 and Japan’s Nikkei ended above 14,000 points for the first time for almost five years. However, the rise was tempered by warnings of a bubble. “We are building crash potential for the autumn [on the possibility] the real economy is not keeping pace with the capital markets,” Giuseppe Amato of German brokerage Lang & Schwartz said.

Stocks have risen in recent weeks after hints of looser fiscal policies. Last week the European Central Bank cut its main rate by 0.25 percentage points to 0.5 per cent, and its head Mario Draghi appeared to open the door to negative rates.

The US Federal Reserve has raised the possibility of increasing its asset purchase scheme, while the Bank of Japan’s new governor Haruhiko Kuroda has embarked on an aggressive programme of monetary easing.

These measures have sent the Dow Jones up by almost 15 per cent since the start of the year, while the FTSE 100 has risen by 11 per cent. Wall Street markets beat the heights achieved in 2007 earlier this year, although the FTSE is still some way off the 6,950.60 of December 1999.