Stronger manufacturing data in the US, China, the eurozone and the UK fuelled optimism that the world economy was poised for recovery.

“There is one big story at the moment and that is growth. A month ago, investors were looking at whether the pace of decline in the global economy was slowing. Now . . . they are not asking whether the global economy is growing but how fast it can expand,” said Marc Chandler, analyst at Brown Brothers Harriman.

Barclays reported record first-half income of £16.2bn (€19bn) and first-half profits of £2.9bn, helped by a strong performance from Barclays Capital, its investment bank.

HSBC reported a 50 per cent fall in first-half profits to $5bn but profits at its investment banking operation jumped from $2.6bn to $6.2bn.

As shares surged, the dollar and the yen, havens for investors fleeing market turmoil, tumbled.

The US currency fell to its lowest against a basket of currencies since October. Sterling rose 1.1 per cent to $1.6907 against the dollar, a 10-month high.

Commodities prices rose across the board to their highest for the year, boosted by resurgent demand for riskier assets. Brent crude jumped to nearly $74 a barrel, up 75 per cent from January.

Base metals, including copper, aluminium, zinc, lead and nickel rallied 4-6 per cent. White sugar jumped to a 26-year high.

Nouriel Roubini, the New York University economist who has been among the gloomiest of forecasters in the financial crisis, said: “As the global economy moves towards growth as opposed to a recession, you are going to see further increases in commodity prices, especially next year.”

This will certenly help noront!

Holding long and strong,

Inca.