LONDON: European stock markets rallied yesterday, with London striking a high for 2009, as investors traded on upbeat company earnings and expectations that interest rates will remain low. The FTSE 100 index of leading shares in London surged to 5,300.98 points—a level last seen in late September 2008 — before pulling back to 5,266.75 points at the end, up 0.69 percent from Tuesday’s close.

Elsewhere, Frankfurt’s DAX 30 soared 0.98 percent to 5,668.35 points and in Paris the CAC 40 gained 0.76 percent to 3,814.39. The DJ Euro Stoxx 50 index of top eurozone shares advanced 0.86 percent to 2,881.01 points.

Fresh data out of China also helped boost hopes of a global economic recovery, with the Asian powerhouse reporting a jump in industrial production and retail sales in October, as well as increased demand for Chinese exports.

The outlook was far gloomier for Britain, where the Bank of England warned that the strength of an economic recovery from the country’s longest recession on record was “highly uncertain” amid “sharply” rising inflation.

The news sent the value of the pound plunging on currency markets but perked up stocks as analysts said the Bank of England report indicated that British interest rates would remain close to record lows of 0.5 percent for some time. “With central bankers unconcerned about inflation and anxious to keep wind in the sails of the recovery, investors know that rates are going to stay low,” said analyst David Morrison at spread-betting firm GFT.

“That hurts the currency, but boosts equities and other assets,” he added.

Rising oil and metal prices also helped bolster stocks, with shares in mining giant Rio Tinto rising 2.46 percent to 3,118 pence in London.

British supermarket chain Sainsbury rose 3.24 percent to 338.2 pence after it reported a 48.2-percent profit leap in the first half of its financial year.

Dutch financial giant ING rocketed up 6.60 percent to 10.18 euros in Amsterdam after the group reported a sharp switch into quarterly profit of 499 million euros as it restructured after a government bailout.