FTSE 100 surges as City guru warns of stock market bubble risk

FTSE 100 surges as City guru warns of stock market bubble risk

Shares in London have closed at their highest level since late February as investors ignored record Covid-19 deaths and warnings from a veteran City guru that an epic bubble of Wall Street crash proportions was bound to burst.

Stock markets around the world rose as optimism that mass vaccinations would ensure a rapid global economic recovery was strengthened by signs that the Democrats had won both vacant Senate seats in Georgia.

With Joe Biden due to be installed as US president this month, news that the Democrats would control both houses of Congress boosted hopes of a bigger-than-expected US stimulus package.

The FTSE 100 index closed 229.61 points higher at 6,841.86, after a rise of almost 3.5% that took it to within 800 points of its pre-crisis level. The rally was underpinned by a surge in oil prices, which made shares in energy companies more attractive, and by strong demand for shares in banks.

By the London close, HSBC had posted a gain of 10%, Standard Chartered had risen 9% and Barclays was up 8%. Shares in mining companies were higher, with Glencore up 8% and Anglo American rising 6%.

Saudi Arabia's announcement that it was cutting crude production, coupled with a decline in US