European stocks climbed to a new record, marking their latest advance in a blistering 2015 rally. The Stoxx Europe 600 index gained 4.49 points, or 1.1%, Thursday to close at 409.15, surpassing the previous peak of 405.50 reached at the height of the dot-com boom in March 2000.
The benchmark, a broad measure of the region’s stock markets containing 600 stocks from 18 countries, is up 19% so far this year as investors fled the paltry returns of the region’s bonds and piled into stocks, betting that an upturn in the economy will boost corporate profits.
The latest leg of the rally has been fueled by the European Central Bank’s efforts to stimulate the lackluster eurozone economy by buying bonds. The program, which mirrors the measures taken by the Federal Reserve in recent years, has crushed the returns available for new bond buyers. As stocks rallied on Thursday, Germany’s 10-year government-bond yield sank to an all-time low of 0.14%.
Depressed bond yields push investors into riskier assets such as equities. At the same time, the bruised eurozone economy is showing signs of life, while the U.S. recovery has weakened. The result: A wave of cash has flowed into Europe’s stock markets.
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