Global stocks and oil prices jumped as hopes of a rapid global economic boom from the coronavirus pandemic, and further central bank support helped offset rising geopolitical risks.
European equities recorded solid gains at the opening clock. The FTSE 100 was up 0.9 percent, the London blue-chip index's third straight gain day, while Dax and CAC 40 rose by similar margins.
Global stock markets have hit their highest level since March this week, driven by green shoots of economic boom and substantial central bank support.
"Compared to the market downturn in previous recessions, the rate and magnitude of this downturn is unusual," said Kerry Craig, global market strategist at JPMorgan. "The difference here is huge amounts of stimulus from governments and central banks."
As a sign that the rise in stock markets was greater, stocks in Europe outperformed Wall Street this week.
"Just as the winners of the last two months ran out of steam and the laggards came to the party," said Deutsche Bank strategist Jim Reid, noting that many expect the European Central Bank to announce an expansion of its stimulus program on Thursday.
Markets in the Asia-Pacific region rose, with South Korea's Kospi allowing almost 3 percent after the government unveiled an additional $ 29 billion stimulus program to support the economy.
There followed a strong show on Wall Street, where the S&P 500 closed up 0.8 percent at a three-month high. US stocks have shot higher despite mass protests in cities across the country following police killings of an unarmed African-American man and rising tensions between Beijing and Washington. Futures linked to the S&P 500 rose 0.4 percent on Thursday.
"Markets are in full liquidity mode" as investors look through headwinds including geopolitical tensions, HSBC strategists said in a note.
“Instead, news of new stimulus packages and possible breakthroughs of vaccines are cheered. This can continue in the short term, but is hardly sustainable, ”they added.
Brent crude climbed back over $ 40 for the first time in nearly three months on optimism that crude oil producers would extend production cuts.
Oil prices were driven by the hope that Opec + nations would prolong the production decline for another month. Brent, the international benchmark, rose 2 percent to $ 40.35 a barrel. The US state of West Texas climbed 2.8 percent to $ 37.83.
"The market was already set to transition from surplus to deficit as we move into the second half of this year, so prices were set to strengthen over the rest of the year," said Warren Patterson, head of commodities strategy i ING. "Obviously, even deeper cuts will speed up the process of rebalancing the market."
Elsewhere in Asia, China's CSI 300 index for shares in Shanghai and Shenzhen was largely flat after the Caixin purchasing chief's index showed that service sector activity rose for the first time in four months in May. New orders jumped at the fastest pace of a decade, indicating a strong improvement in some parts of the world's second-largest economy after the outbreak of Covid-19.
Signs that Australia was on course for its first technical decline in three decades dampened some of the recent enthusiasm for the Australian dollar, giving up some of the earlier gains to fall back on a five-month high of $ 0.6983 against the US counterpart. Economists expect the pandemic to end the country's 29-year run without a recession, with Canberra predicting the economy to contract by as much as 10 percent in the second quarter.