A powerful end-of-year stock market rally has sent equities to their highest levels since the collapse of Lehman Brothers more than two years ago, with hopes for the US recovery encouraging investors to pull billions of dollars out of bonds.
The pre-Christmas rally has propelled leading US and European shares to their biggest December gains in a decade and pushed London’s benchmark FTSE 100 index through the 6,000 level on Thursday for the first time since June 2008.
The FTSE All-World index rose to 216.73, up 0.2 per cent, its highest level since September 2008. Even as Fitch downgraded Portugal’s sovereign debt, investors voiced optimism that stronger economic growth next year would lead to further gains. More money is pouring into equities than at any time in the last four years.