The FTSE 100 index of leading shares hit its highest level so far this year on hopes that the global recession could be ending more quickly than expected.

All European stock markets opened cautiously higher today on the surprising news that France and Germany are emerging from recession more quickly than expected and comments from central bankers in the United States and UK that the downturn is levelling out.

The FTSE 100 rose 40.3 points to 4757.0, that is its best level for more than ten months.

Germany led other European markets higher with the Dax index in Frankfurt gaining 34.66 points at 5384.75 while in Paris the CAC index gained 10.84 points to 3518.08. Wall Street was ibndicating another strong performance again today having risen by more than 1% overnight.

British gilts fell reflecting the overnight news from the Federal Reserve Bank that it will slow down its $300 billion programme of buying US government bonds.

Bank of England governor Mervyn King yesterday indicated that the similar £175 million quantitative easing programme in the UK will not be unwound for some time to come. He also indicated that interest rates in this country would remain low as the economic recovery would be “slow and protracted.”

In the currency markets it was the dollar which was on the slide as much as the euro was on the rise. Despite Germany and France emerging from recession the second quarter saw most of their weaker neighbours still racking up significant declines in economic output.