FTSE shares enjoy record-breaking run

The rise of 37.55 on the UK's bellweather index took the FTSE 100 8.7 per cent higher than when its run started on July 13th. Supermarket WM Morrison led the rises yesterday after reporting brisk business at its supermarkets and Next’s improved guidance also cheered investors. As a result the retail sector powered ahead on the day.

Buyers have been attracted to the markets after last year's financial crisis dragged them to sharply lower levels. Now investors have been caught up in the increasing optimism over a recovery and are re-building their shareholdings.

Corporate earnings have been behind the improvement in sentiment, leading to a "bottom-up" recovery, with large companies in the US beating estimates and those in the UK following suit. Analysts too have spoken positively about the markets with respected figures like Invesco's Neil Woodford pointing to value in some areas and others also advising to buy. Even arch-bear economist Nouriel Roubini has said the worst of the crisis is now over, leading to rises in US markets.

However some are warning that the gains are coming on low summer trading volumes and caution getting carried away in what may still be volatile markets.

WHAT THEY ARE SAYING:Chris Watling, an economist at Longview Economics, in the Independent: "This is good news. There will be more in 2009 and I'm a bull [on the markets] for this year only because I'm waiting for the next recession. I'm not surprised by this, though. If you look at the recovery in the 1970s it was a similar pattern. You had an extremely strong run for the first three to four months, then a consolidation and then it went off again. That is what we are now seeing."

Angus Campbell of spread-betting firm Capital Spreads in the Daily Telegraph: "Seven days of gains has not been seen for four years and it’s a significant achievement for the market [but] sentiment can shift very quickly in these markets and just when you think investors are gearing up for the next major bull market, confidence can be swept from underneath them." ·