Global shares jump on G20 pledge

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US shares have hit a 13-month high and stock markets in Europe have jumped sharply after the G20 pledged to keep supporting the global economy.

The main Dow Jones index in the US climbed 203 points, or 2%, to 10,223.

Investors took confidence from comments made by the G20 finance ministers on Saturday that they would keep economic stimulus measures in place.

Governments have pumped billions of dollars into their economies to boost demand during the downturn.

They have also kept interest rates very low.

'Risk taking'

Now that most major economies have started to grow again, there had been uncertainty about when governments would withdraw such support.

But the G20 pledge gave investors hope that economic recovery would continue on the back of continued support.

The UK's FTSE 100 index climbed 1.8%, France's Cac 40 gained 2.1%, while Germany's Dax rose 2.4%.

Talk of low interest rates also put downward pressure on the dollar, which in turn pushed the price of gold to a new all-time high of $1,107 an ounce.

The dollar is seen as a safe haven investment, so when it is weak, many investors prefer the security offered by gold.

However, not everyone is convinced that the good times are here to stay. Some analysts believe that sentiment, rather than company fundamentals such as profitability, is driving shares higher.

"Central banks around the world are continuing to prop up the economy and support risk taking. There's very little regard for valuation," said Jack Ablin at Harris Private Bank.

"It looks to me like a pure risk rally and it is consistent with the G20 comments."