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Record-breaking London stocks spearhead global rally

LONDON (AFP) – London’s stock market zoomed to another record peak yesterday, in a broad-based global rally fuelled by easing Middle East tensions, bright earnings and hopes of falling interest rates as inflation slows.

The British capital’s benchmark FTSE 100 index of top blue-chip companies hit 8,092.12 points, extending this week’s record-breaking run that began on Tuesday.

London this week became the latest global bourse to scale historic heights, following recent records in Frankfurt, Paris, Tokyo and Wall Street, propelled also by the prospect of global interest rates cuts owing to easing price rises.

Asian and Europe pushed higher after a strong US rally as investors also cheered news of US carmaker Tesla’s plans to develop a more affordable electric vehicle, and digested the latest corporate results.

“Risk is back on in a broad way,” XTB analyst Kathleen Brooks told AFP. “Earnings reports are doing the talking this week, and so far the results are generally good.”

Frankfurt stocks rose as traders drew further comfort from a key survey which showed that German business sentiment rose for a third consecutive month in April, underlining hopes of a recovery in Europe’s biggest economy.

A view of the Thames River and the city of London, United Kingdom. PHOTO: AP

The Ifo institute’s closely-watched confidence barometer, based on a survey of around 9,000 companies, rose to 89.4 points, up from 87.9 points in March, in an increase that beat expectations.

Paris stocks grew, although Kering shares dived eight percent one day after the French luxury giant issued a profit warning following slumping sales at its flagship Gucci brand.

Sentiment was also buoyed as many investors fished for bargains following a recent pullback, while easing Middle East tensions provided additional support.

Oil prices meanwhile receded after jumping on Tuesday on a report pointing to another build-up in US inventories that raised questions about demand in the world’s top economy.

Wall Street had bumped higher Tuesday with the Nasdaq and S&P 500 each piling on more than one per cent.

General Electric, Spotify, and diaper and paper product brand Kimberly-Clark were among the companies posting strong gains after releasing quarterly reports.

Tesla announced on Tuesday a big profits miss – but said it would speed up the launch of cheaper vehicles, which saw its share price soar in after-hours trade.

Microsoft and Alphabet are among the other top firms set to announce their results this week.

Hopes for a strong batch of earnings — particularly from the crucial tech titans — has been a key driver of the rally in stocks, helping to offset disappointment that the Federal Reserve will not cut interest rates as much as hoped this year.