Shares are back to 2008 level

GLOBAL stock markets surged yesterday to their highest level since the collapse of Lehman Brothers over two years ago, in reaction to the Federal Reserve’s decision to try and hasten the pace of the recovery by pumping $600bn (£372.69bn) of fresh funds into the US economy.

The FTSE 100 index of leading shares closed up 113.82 points or two per cent at 5,862.79 – its highest point since 9 June, 2008, while in Europe Frankfurt’s Dax rose by 1.8 per cent and Paris’s CAC-40 by almost two per cent.

Wall Street followed suit with the Dow Jones industrial average jumping by 219.71 points to close at 11,434.84 – its highest level since the Lehman collapse. The Nasdaq, meanwhile, finished at its highest level since January 2008.

The rally was broad-based with commodity prices rocketing, propelling gold to a record high of $1,390.76 an ounce and the price of a barrel of Brent crude oil to a six-month high of $87.80.

Sterling raced to as much as $1.6299 against the dollar, a level not seen since January as investors bet the Fed’s boost could fuel inflation and devalue the greenback. “The Fed has taken a fairly aggressive stance raising confidence that Bernanke is doing everything he can to keep the US economic recovery on track,” said City Index’s Joshua Raymond.