After the long Easter weekend, Tuesday started strongly for European stocks despite continued uncertainty over a third coronavirus wave on the continent.
The Stoxx Europe 600, which represents companies of all market caps across 17 European counties, was up 0.8 per cent to a record 435.7 points.
This has surpassed its previous all-time high of 433.90 points in February 2020, climbing more than 60 per cent from the lows of March last year.
The picture across Europe was equally optimistic and, as of midday, the FTSE 100 was up 1.19 per cent, the DAX was up 1.12 per cent and French CAC 40 was up 0.62 per cent.
On Monday, prime minister Boris Johnson announced that the UK is continuing on its roadmap out of the pandemic, with shops, hairdressers and gyms re-opening on 12 April - boosting the UK recovery trade.
Performance of Stoxx 600 since March 2020
Source: FE Analytics
Across Europe, the biggest beneficiaries since the start of the year have been the depressed sectors of 2020, including banks, automakers and travel companies.
Niall Gallagher, investment director for European equities at GAM, said: “European equity markets have a higher percentage tilt to the more distressed cyclical and value parts of the market that performed poorly not only in 2020, but for several years before as well.
“Any change in the economic environment that sees a pick-up in growth and a pick-up in inflation is likely to positively impact these sectors and as they are a higher weighting in the market, this explains the recent expectations that European equities may do better in the next few months.”