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LONDON (AFP) – London surged higher in morning trade on Tuesday with mining shares boosted by record metals prices, amid hopes of further stimulus measures for the US economy

In late morning deals, the FTSE 100 index rallied 1.02 percent to 5,829.23 points, boosted also by an upbeat trading update from retail giant Tesco.

Commodity markets rallied sharply, with both copper and gold striking record high points, while crude oil traded at the best levels for more than two years.

"The FTSE 100 powered higher ... on the back of a strong performance in the mining and retail sector," said analyst Joshua Raymond at financial spread-betting firm City Index.

"The miners are benefiting from correlated strength in commodity prices, with copper prices rallying in London hitting a record in the process, whilst crude oil prices have also edged higher."

On the London Bullion Market, gold rose to a record pinnacle at 1,428.55 dollars per ounce, dragging sister metal silver to another 30-year high.

And on the London Metal Exchange, copper for delivery in three months soared to an all-time peak 9,014 dollars a tonne.

Equities were also buoyed as traders mulled the chance of the US Federal Reserve launching a fresh round of monetary stimulus if the world's biggest economy remains stuck in the doldrums.

Fed chief Ben Bernanke said in an interview to CBS television broadcast Sunday that "it's certainly possible" that the Fed might inject into the markets more than the 600 billion dollars decided on last month.

In addition, analysts said that a promise by US President Barack Obama to extend tax cuts by two years would also bolster financial markets.

Obama, bowing to his Republican foes in their first major battle since the November election, agreed to extend tax breaks for the wealthiest Americans under a sweeping deal aimed at averting a big 2011 tax hike.

The president yielded in the deal announced late Monday, which extends tax cuts enacted under former president George W. Bush for all income brackets despite his earlier push to exclude top earners.

"Obama's extension of the Bush-era tax credits has the prospect to add some seasonal cheer but the eurozone debt issue continues to linger," said IG Markets analyst Chris Weston.

Later on Tuesday, investors will revisit those concerns, as debt-riddled Ireland unveils its latest austerity budget.

Irish finance minister Brian Lenihan will deliver a 2011 budget that will contain a combined 6.0 billion euros (8.0 billion dollars) of taxation hikes and spending cuts.

The statement will be the first in a series of budgets to implement a total fiscal correction of 15 billion euros over the next four years.

The deal with the EU and the International Monetary Fund for 67.5 billion euros in external loans and guarantees, plus 17.5 billion taken mostly from Ireland's public pension fund, has angered citizens.

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LONDON (AFP) – European stock markets surged higher Tuesday, with Frankfurt hitting a 2.5 year-high and mining shares boosted by record metals prices, amid hopes of further stimulus measures for the US economy.

In late morning deals, London's FTSE 100 index rallied 1.02 percent to 5,829.23 points, boosted also by a upbeat trading update from retail giant Tesco.

Across in Germany, Frankfurt's DAX 30 index climbed briefly above 7,000 points for the first time since June 6, 2008, while the Paris CAC 40 soared 1.83 percent to 3,817.76 points.

Commodity markets rallied sharply, with both copper and gold striking record high points, while crude oil traded at the best levels for more than two years.

"The FTSE 100 powered higher ... on the back of a strong performance in the mining and retail sector," said analyst Joshua Raymond at financial spread-betting firm City Index.

"The miners are benefitting from correlated strength in commodity prices, with copper prices rallying in London hitting a record in the process, whilst crude oil prices have also edged higher."

On the London Bullion Market, gold rose to a record pinnacle at 1,428.55 dollars per ounce, dragging sister metal silver to another 30-year high.

And on the London Metal Exchange, copper for delivery in three months soared to an all-time peak 9,014 dollars a tonne.

Equities were also buoyed as traders mulled the chance of the US Federal Reserve launching a fresh round of monetary stimulus if the world's biggest economy remains stuck in the doldrums.

Fed chief Ben Bernanke said in an interview to CBS television broadcast Sunday that "it's certainly possible" that the Fed might inject into the markets more than the 600 billion dollars decided on last month.

In addition, analysts said that a promise by US President Barack Obama to extend tax cuts by two years would also bolster financial markets.

Obama, bowing to his Republican foes in their first major battle since the November election, agreed to extend tax breaks for the wealthiest Americans under a sweeping deal aimed at averting a big 2011 tax hike.

The President yielded in the deal announced late Monday, which extends tax cuts enacted under former president George W. Bush for all income brackets despite his earlier push to exclude top earners.

"Obama's extension of the Bush-era tax credits has the prospect to add some seasonal cheer but the eurozone debt issue continues to linger," said IG Markets analyst Chris Weston.

Later on Tuesday, investors will revisit those concerns, as debt-riddled Ireland unveils its latest austerity budget.

Irish finance minister Brian Lenihan will deliver a 2011 budget that will contain a combined 6.0 billion euros (8.0 billion dollars) of taxation hikes and spending cuts.

The statement will be the first in a series of budgets to implement a total fiscal correction of 15 billion euros over the next four years.

The deal with the EU and the International Monetary Fund for 67.5 billion euros in external loans and guarantees, plus 17.5 billion taken mostly from Ireland's public pension fund, has angered citizens.

In Brussels this week, European finance ministers gathered to discuss possible new bailout plans for debt-burdened member states.

Wall Street had closed mixed on Monday as traders weighed remarks by Bernanke signaling the central bank was ready to introduce new stimulus steps if the economy fails to take off.

Asian markets mostly rose on Tuesday as dealers brushed off a report that China will hike interest rates soon, but Japanese shares sank as the yen surged against the dollar.

The greenback has fallen hard against the Japanese unit following comments by US Federal Reserve head Ben Bernanke that the bank could pump more money into the economy.

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Yet peaked intra-day $ 1,432.50 an ounce, a historical record, before the licensees benefit settled in photo: Alamy

Yet peaked intra-day $ 1,432.50 an ounce, a historical record, before profit makers settled in. Argent term reached $30.75 - the highest level since March 1980 - relaxation in afternoon trade before.

In an interview Sunday night on American television, Ben Bernanke, the Chairman of the Federal Reserve has been suggested that the Central Bank can launch most active purchases to support the US economy sick, but he also said that "it seems likely" that the economy would fall back into recession.

Copper prices has also increased to a record in London Tuesday, with term for the delivery of three months amounting to $9,044 a tonne in trade intraday, beating the previous record of $8,966 defined on 11 November. Fears are mounting a future squeeze copper demand should soon exceed supply.

"Copper prices are also favorable messages which surround the stimulus to the United States and emerge from the continuous demand in China," said John Meyer, head of mining broker Fairfax.

Minors have driven up FTSE 100, which closed at its highest level in three weeks. African minor gold Barrick Gold was the gainer more high, rising 6pc, FTSE 100 game of pure copper Antofagasta amounting to 4 9pc, third largest riser card. Mining group diverse single large listed do not in London is Brazilian Vale giant.

Gold prices rose by 28pc this year, a year of gains right-10th. Silver prices jumped by 76pc and copper is 20pc.

But slipped to a minimum of $1,406.30 later Tuesday, while copper closed at $8,800.

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Now, net debt stood at ?952bn, representative of 64 6pc of GDP.

Net borrowings of public sector came to ￡ 15 6bn last month, ￡ 8bn 14 a year earlier, the Office for National Statistics (ONS) said.

The pound sterling slipped $ 1.57 in the wake of the worst that figure expected, analysts expected to show a decline in loans to 5.3 ￡ 14.

Preferred measurement for loss of profits, which removes the effects of its intervention in the financial sector, Government expanded to 5.3 ￡ 16, from ￡ 15 5bn last year.

At the end of September, net debt stood at ￡ 952bn, representative of 64 6pc of GDP, the highest in the months since the beginning of the records in 1993.

September is usually a month when the deficit is slightly more than the average for the year, economists have noted.

However, the worst figures forecasts are likely to be used by the Government as further evidence of the need for a tight fiscal policy, despite concerns opponents as too stiff contraction expenditure could cause a recession double.

Economists react the said numbers even if they were largely in accordance with expectations, record loan review global government expenditure would grow more into the spotlight.

Hetal Mehta, Daiwa Capital Markets Europe said: "data today highlight the magnitude of the challenge ahead, and that is why we expect any major"report"the announcement of exam expenses later today .the Chancellor should move forward with implementation of wild reductions to achieve its goal."

Samuel graves, economic capital added: "September overflow casts further doubt on the ability of Government to meet June budget forecasts and casts a shadow on the expenditure review".

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