Global equity markets rallied on Tuesday, with the Nasdaq and S&P 500 indexes setting record closing highs on Wall Street, while European energy shares posted their biggest daily gain since January as crude prices surged.

US stocks soared on upbeat results from Twitter Inc , Coca-Cola Co, United Technologies Corp and Lockheed Martin Corp, which eased fears of a profit recession in a busy week for corporate earnings.

European shares rebounded from early weakness, pushing the STOXX 600 index to eight-month highs at the close. The energy-heavy FTSE 100 in London led regional gains, up 0.85 per cent at a more than six-month high.

European oil and gas shares jumped 2 per cent, with BP Plc and Royal Dutch Shell Plc leading gains in London, while the FTS Eurofirst 300 Index of leading European shares hit eight-month highs.

The S&P and Nasdaq indexes roared to record closing highs, ensuring the bull market that started in March 2009 remains alive. The benchmark S&P 500 has surged 17.5 per cent this year, helped by a largely upbeat first-quarter earnings season, hopes of a US-China trade resolution and a dovish Federal Reserve. The Nasdaq has gained 22.5 per cent so far this year.

“The government shut down that ended in January weakened the US economy and corporate growth, but companies have done extraordinarily well since March and growth continues strong,” said George Boyan, president of Leumi Investment Services in New York.

“We remain overweight (in equities) and any type of pull back we would view as an opportunity to add equity exposure,” Boyan said. “We've enjoyed quite a run but there's nothing to cause me to want to take off exposure at this point.”

Twitter surged 15.6 per cent, its biggest single-day gain since October 2017, after posting better-than-expected quarterly revenue and a surprising rise in monthly active users.

Lockheed Martin posted better-than-expected quarterly profit as US President Donald Trump's looser policies on foreign arms sales boosted demand for missiles and fighter jets. Shares rose 5.7 per cent.

News that the United States told buyers of Iranian oil to stop purchases by May 1 or face sanctions lifted Brent, the global benchmark, and made for a lively return from a four-day Easter break for European markets.

Rising crude prices are a bullish sign of a stable economy and consumer, Boyan said. If prices rise much further it could speed the pace of inflation and cause the Fed to engage in more tightening, “but I don't think we're there yet,” he said.

The Dow Jones Industrial Average rose 145.34 points, or 0.55 per cent, to 26,656.39. The S&P 500 gained 25.71 points, or 0.88 per cent, to 2,933.68 and the Nasdaq Composite added 105.56 points, or 1.32 per cent, to 8,120.82. MSCI's gauge of stocks across the globe gained 0.56 per cent.

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