Hopes of global recovery as markets soar

WORLD stocks closed the first day of trading this year at a 15-month high, leading to increased hopes of a sustainable economic recovery.

The FTSE 100 index reached a 16-month peak, up 1.6 per cent, to reach 5,500.34. The closing figure was the highest point since September 2008 when Lehman Brothers collapsed.

The Dow Jones industrial average rose 1.5 per cent to 10,584.96, the S&P 500 gained 1.6 per cent to 1,132.99, and the Nasdaq composite index jumped 1.7 per cent to 2,308.42.

The German DAX gained 1.5 per cent to 6048.30 and the French CAC 40 rose two per cent to 4013.97.

In Tokyo the Nikkei 225 reached a 15-month high when it climbed one per cent to 10,654.79.

Strength in commodity stocks and banks outweighed falls from real estate firms and life insurers.

Royal Bank of Scotland shares climbed 2.9p to 32.1p.

The rise in commodity prices meant mining companies were among the biggest winners.

Oil companies also benefited as oil prices reached $81 a barrel before falling back slightly.

BP and Royal Dutch Shell rose by 2.3 per cent and 2.6 per cent respectively.