Economic boom in sight as global shares hit all-time highs

Recovering economies and low interest rates have pushed world shares to their highest ever levels.

World shares were close to their highest levels ever yesterday, 9 June, as low interest rates in key economies and moves towards economic recovery buoyed investor confidence.

A report from Reuters shows that MSCI’s 45-country All-World share index, an important benchmark for the performance of shares around the world, edged up 0.15 per cent to stand at 427.11 points. That was not far away from 428.63, the previous peak figure achieved before the financial crisis in 2007.

It came on the back of positive signs from European markets, which opened strongly today seeking the tenth week of gains in a row.

Mario Draghi, president of the European Central Bank (ECB), said last week that negative interest rates were to be imposed on banks that deposit their cash with ECB in a bid to boost inflation and encourage banks to increase their lending activity. With policy set to remain loose for some time yet, stocks across Europe are enjoying considerable gains.

But Asian stocks have also been performing well. The Bank of Japan’s aggressive quantitative easing programme designed to keep the value of the yen low has led to a general rise in the Nikkei, which has also enjoyed a boost thanks to the recovery being reported in the US.

In turn, improving conditions in the US have given Wall Street a new lease of life in the past few months – in fact, it reached another record close at the end of last week after the government published encouraging jobs figures.

Meanwhile, several emerging markets posted strong gains. Reuters reports that stocks were close to a one-year high. Major currencies such as the South Korean won and Malaysian ringgit were also at particularly strong levels, although there may be concerns about this affecting their export proposition in the coming months.

Public holidays in countries like France and Germany meant that trading was less frenetic than usual today, too, which could mean that stocks might have otherwise gone even higher.