Shares prices in Paris have reached record levels, joining their London counterparts, as traders gain confidence in the chances of a soft landing for economies in Europe and the US.
In morning trade on Thursday, the Paris CAC 40 index jumped 1.1 per cent to a record 7,387.29 points, beating a peak hit last year by just a few points.
London's FTSE 100 index of blue-chip shares crossed the 8,000 level on Wednesday and while it closed just below that level, the index was back into record-breaking territory on Thursday.
“The recent momentum has been astounding in its speed, and highlights that the outlook for UK plc has turned a corner. Fundamentally though, sentiment could shift quickly depending on the outcome of central bank decisions,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.
“The likely outlook for now shows a relatively clear path back to more normal fiscal environments, but as the last few years have shown, destabilising obstacles can appear with very little notice.”
“With new market records being reached, it’s not so much an issue of what goes up must come all the way down, as it is understanding that dizzying new heights inevitably result in trips and falls eventually.”
Note of caution
Traders feel the cycle of rising inflation and interest rates is being unwound, as inflation comes under control in the US and EU, and are more confident about economic prospects than they have for some time.
“The US jobs data remains strong, inflation continues coming lower. And yesterday's US retail sales data came as a cherry on top, with an eye-popping 3 per cent rise last month,” said Swissquote Bank senior analyst Ipek Ozkardeskaya.
Nonetheless, others are not totally convinced and sounded a note of caution.
“Everybody is trying to figure out whether this is going to be a once-in-a-lifetime soft landing or if it's just taking longer before we get a panic recession,” said Jerry Braakman at First American Trust.
