The markets still expect a widespread fall in European interest rates despite the Bundesbank's refusal to cut German rates last week. They have also shrugged off worries over renewed turbulence on the foreign exchanges and the faltering US and Japanese economies.
In London, price rises are being fuelled by confidence in the UK economic recovery and continuing expectations that interest rates are likely to fall to 5 per cent or lower by the end of the year. On Thursday, the Confederation of British Industry raised its forecast for GDP growth next year to 3 per cent.
The FT-SE 100 index climbed 21.4 points on Friday to close above 3,100 for the first time.
However, the surge in equities may be checked by some disappointing company results. George Hodgson, of Warburg Securities, said: 'We remain very wary of the market at current levels. The results season could rerate the market, but hopefully the decline will be gentle, rather than a bang.'
On Friday, hopes of lower interest rates pushed up prices in Frankfurt, Paris, Milan and Zurich, with French stocks hitting a new record.Reuse content