The FTSE 100 hit another all-time high yesterday.
Borrowing costs also fell on fresh hopes that interest rates will be cut this summer.
In another record day in the stock market, the blue-chip index rose above 8,300 for the first time to an all-time high of 8,335.
It ended the day up 1.2 percent, or 100.18 points, to 8,313.67, its highest close ever.
The Footsie is up almost 8 per cent so far this year, in a boost for savers with money tied up in the stock market through pensions, ISAs and other investments.
Record high: On another record day in the stock market, the blue-chip index rose above 8300 for the first time to an all-time high of 8335
“The blue-chip index has hit another all-time high and the sun is shining, exactly what is needed to cheer investors,” said Russ Mould, chief investment officer at brokerage AJ Bell.
The rally came as traders bet the Bank of England will press ahead with interest rate cuts this summer, although they are unlikely to begin as soon as this week.
The central bank’s rate-setting monetary policy committee (MPC) is widely expected to leave rates unchanged at 5.25 per cent tomorrow.
But falling inflation is likely to pave the way for the Bank to cut rates in the coming months – possibly in June – and at least one more reduction is planned for later in the year.
The yield on 10-year government bonds – a key measure of borrowing costs in bond markets – fell below 4.14 percent to its lowest level in almost four weeks.
Jens Larsen, director of consultancy Eurasia Group, said there was “a push among MPC members to start cutting rates soon”, even as the United States resists such a move amid concerns about inflation.
Stock Watch – Centaur Media
Shares in takeover target Centaur Media plunged after a private equity firm ended its search.
The firm, which owns titles such as The Lawyer, said last month it received a “very preliminary expression of interest” from WPEF, a holding company controlled by private equity firm Waterland.
But yesterday WPEF said it “has no intention of making an offer.” Centaur insisted that he remains “confident” in his future.
The shares fell 20.2 per cent, or 10.5p, to 41.5p.
He added: “While I don’t think that will happen on Thursday, they should have enough votes in June.” “There are good reasons for them to move forward.”
Susannah Streeter, head of money and markets at investment platform Hargreaves Lansdown, said hopes of interest rate cuts are boosting share prices.
Meanwhile, the FTSE 250 gained 1.2 per cent, or 248.54 points, to 20,413.08. Switzerland’s Pictet Asset Management upgraded UK stocks to “neutral” from “underweight” as it believes interest rate cuts will lift profits for domestic companies listed in London.
Analysts at Deutsche Bank Research were even more optimistic.
They told customers to buy shares in 24 London-listed companies, including Irish conglomerate DCC (up 4.6 percent, or 250 pence, to 5,745 pence) and Holiday Inn owner IHG (up 2.3 per cent, or 176 pence, to 7,902 pence).
And the bank expects recruiters to bounce back once candidate and client confidence improves.
Page Group rose 0.8 per cent, or 3.6 pence, to 446.8 pence, Hays added 1.5 per cent, or 1.4 pence, to 93.6 pence, Robert Walters rose 0.8 per cent, or 3p, to 371p and S Three gained 1.5 per cent. or 6.5p, to 435.5p.
The broker also issued a “buy” rating for IWG, which it said is benefiting from flexible working.
The office space provider said revenue was flat at £727 million in the first quarter to the end of March.
Despite this, Deutsche Bank Research also rated IWG with a “buy” rating as it benefits from flexible working. The shares rose 0.8 per cent, or 1.5p, to 191.3p.