Why has the FTSE 100 hit fresh highs and can it keep going?
The UK stock market has shaken off a January wobble to rise to the highest level so far this year as commodity prices recover, ECB stimulus lifts Europe and signs of a recovery in China all outweigh Brexit fears and a worsening global slowdown.
There is still a very real possibility that Britain will vote to leave the EU when the referendum takes place on June 23. But the latest polls say otherwise.
If a referendum was held today, Remain would secure 52pc of the vote, an increase of three points since the previous ORB poll, while Leave would secure 43pc cent of the vote, a decrease of five points since the previous poll. The bookies at Betfair estimate this to mean a 70pc chance of remaining in the EU.
Still, the risk of exiting the EU has weighed on the UK currency, with the pound down more than 7pc against the US dollar over the past six months. However, this is actually good news for the majority of the companies listed in the FTSE 100 whose goods will effectively be cheaper to overseas buyers when sold in pounds.
The most obvious stocks that would be hit are the UK banks, which could suffer from changes to rules that allow the free movement of money around Europe. That said, the concerns over banks have been outweighed by bigger factors in the world economy
The Chinese economy was slowing fast at the end of last year and this posed a serious threat to the global economy as China contributes around a third of all growth.
The stock market feared the worst and suffered sell-offs in August last year and again in January on the back of weak Chinese exports data, devaluation of the yuan and a sharp fall in Chinese reserves.
China has taken a well worn page out of the Western economic playbook and thrown money at the problem, or debt to be more accurate.
A sharp rise in government investment fuelled by debt has achieved the desired effect. Economic growth rebounded in the first quarter of the year as China was flooded with new money.
There are clear questions about the sustainability of this rally, such as how long China can keep increasing its debt levels. However, the stock market is not here to make moral judgments on Chinese monetary policy, it is merely here to discount a huge amount of new money in the system.
Guidance and bazookas
Two of the largest central banks in the world have also made shifts in their language which all benefit the stock market. At the start of the year the FTSE 100 was pricing in four interest rate rises in the US in the year ahead. The Federal Reserve language has brought this back to one at very most, or even none at all.
Mario Draghi, president of the European Central Bank, also gave investors something to cheer about. In early March he said interest rates would stay unchanged for the foreseeable future. He also pumped more money into the system by increasing the bond buying scheme from €60bn to €80bn a month. Cheaper debt and more easy money is always good for stock markets.
As China has pulled back from the brink, and with more money sloshing round the global economy, commodity prices have been thrown a lifeline. None more so than the oil price.
In the middle of January the oil sector was staring into the abyss with crude at $28 per barrel, but prices turned a corner by February after OPEC members began talking about freezing production. The oil price had erased its losses for the year by the start of this month, and has been on a tear over the past three weeks, gaining more than 17pc to $44 per barrel. The latest bounce came from a strike by oil workers in Kuwait.