Media playback is unsupported on your device Media caption Watch the BBC's Michelle Fleury at the NYSE explain the record figures

New York's Dow Jones share index set a new all-time high on Tuesday, while London's FTSE 100 closed at it highest level in five years.

The rallies mean the stock markets are returning to levels not seen since before the global financial crisis.

The Dow reached 14,285 during the day, exceeding the previous record intra-day high of 14,198, set in October 2007.

It closed slightly lower at 14,256. The FTSE closed at 6,432, its highest close since January 2008.

The recovery suggests investors are regaining confidence in the US and world economies following the financial crisis and global recessions of recent years.

The Dow has more than doubled in value since it plummeted to less than 6,550 points in the depth of the crisis in March 2009, while the FTSE has risen by 68% from its 2009 low.

The US's other closely-watched index, the S&P 500, also ended the day just short of its pre-crisis high, having gained 125% since 2009.

Returning confidence

Dow Jones Industrial Average Founded in 1896 by Wall Street Journal editor Charles Dow.

Now one of the most closely watched share indices in the US, alongside the broader S&P 500 and the tech-heavy Nasdaq

Comprised of 30 major US companies including Coca- Cola, Microsoft, Wal-Mart and General Electric.

Around two-thirds of listed companies are manufacturers of industrial or consumer goods.

Investors have been encouraged by signs of recovery in the US housing market in recent months, a return of consumer confidence, and signs that big businesses are beginning to invest in capital spending and hire more staff.

"Key data is turning supportive. Companies are ready to re-invest and grow profitably. With luck, we will see a recovery take hold in the second half of the year," said Paul Atkinson, head of North American equities at Aberdeen Asset Management.

"The question now is whether we are seeing a stealth rally in danger of running its course… or whether we have the conditions for further market gains."

The most recent US data, released on Tuesday, suggested non-manufacturing industries, which account for about 90% of the economy, continued to expand last month.

The Institute for Supply Management said its services index rose to 56 in February from 55.2 in January - its highest level in a year.

In the UK, strong corporate earnings have pushed the market up, with mining and banking shares leading.

QE staying

Investors in both the US and the UK have also been reassured by signals that central banks are committed to continuing their economic stimulus programmes, which investors see as essential to the recovery of global economies.

These measures have had the effect of driving down the returns on government debt, making other assets, such as shares, more attractive.

The European Central Bank, the Bank of England and the Bank of Japan are all expected to stick with low interest rates and quantitative easing programmes at meetings this week.

On Monday US Federal Reserve officials gave assurances that they would press on with the central bank's QE programme, in which it spends $85bn (£56bn) a month on buying bonds.

But some investors also warn that both the UK and US recoveries remain sluggish, while growth in China has also slowed slightly, and the eurozone remains mired in recession.

"What happens when this [QE programme] kind of evaporates or goes away, that's the major question in the back of my mind," said Anthony Conroy, head trader at US brokerage BNY Convergex.

"But right now, the economy, the market, everything looks fairly healthy. Stocks still look fairly inexpensive."