World stocks hit two-year high

City A.M. Reporter
World stocks hit their highest level since September 2008 while oil held near a two-year peak as favourable US data reinforced expectations economic growth will retain momentum into next year.

Wednesday's upwardly revised data showing the US economy expanded at 2.6 per cent in the third quarter, coupled with recent retail sales figures, pointed to firmer economic activity in the world's largest economy.

Stronger banking stocks helped the S&P 500 index hit its highest level since the collapse of Lehman Brothers.

"The corporate picture still looks very bright, the trend towards higher profits is going to continue and public policies should remain shareholder-friendly," said Henk Potts, equity strategist at Barclays Wealth.

"In terms of the macro environment, we would expect most of the economies to keep growing and that is a pretty powerful mix."

The MSCI world equity index was up 0.1 per cent, having earlier hit 328.89, its highest since early September 2008. The index has gained nearly ten per cent this year.

The FTSEurofirst 300 index was up slightly on the day, having hit a 27-month peak earlier, while emerging stocks were steady. Tokyo was shut for a holiday.

US crude oil stood at $90.48 a barrel, within half a cent of the peak that was the highest since October 2008.

Abnormally cold weather in the United States and Europe has spurred the rally above $90, the latest leg in a more than 40 per cent rise from a year low in May.