FTSE has its best run for five years after ninth straight day of gains
The rally on the FTSE 100 Index went up a gear yesterday with a 1.5 per cent rise sending it past 4500 points.
This meant there has been nine straight sessions of gains and the Footsie has now gone up more than 10 per cent in the latest rally - the longest winning streak for more than five-and-a-half years.
It went to 4560 points - its highest level since January - as economic cheer in America provided the latest boost in an extended rebound.
The Dow Jones industrial Average on Wall Street went to above 9,000 - a six-month high.
Thumbs up: Traders in the U.S. and UK celebrated as markets continued their rise, with the FTSE 100 back above 4,500 for the first time since January
US real estate group The National Association of Realtors said sales of previously occupied homes rose 3.6 per cent from May to June, marking the third monthly increase in a row and raising hopes of economic recovery.
And a surprisingly good second-quarter earnings season from US stock market heavyweights also provided a boost shares.
Ford, eBay and 3M were the latest to impress the US market today,
helping the Dow Jones to make the hundred-point opening leap that
lifted the subdued Footsie into a sudden sixty-point gain.
'So far, so good; expectations have been eclipsed and there is no doubt
that there is hope for the future with investors happy to increase
their appetite for risk,' said David Buik, markets analyst at BGC
Partners.
Upbeat data on the UK economy and housing market has also played a part
in underpinning the market, as has an absence of any particularly bad
corporate news.
Investors will now be watching keenly to see if UK shares can hold on to recent gains and continue the bull run. Although the consensus among analysts and traders is that some short-term profit-taking is almost inevitable, there is more disagreement over whether the market is set for new highs above the 6 January close of 4,638.
Anthony Grech, market strategist at IG Index, said: 'Today's strength
has seen the FTSE back at its best level for more than six months and
sees the index finally cracking the 4,500 barrier that had stopped so
many rallies since early May.
'The next big level for the market is the high for the year of 4,700
and with market sentiment once again bullish, we may not have to wait
too long to see how successfully this can be tested.'
The Footsie began to recover in spring from the battering it took in
the financial crises of last year.
The turning point came at the lows
in early March, when investors began to believe that banks were stable
and lending was improving, and that shares were cheap again.
The FTSE 100 embarked on a recovery, with an 8 per cent increase in
April - the biggest surge for six years. It also became an official
bull market, having risen more than 20 per cent from the 3 March.
Today, miners accounted for a good chunk of the gain, taking up the top
ten places on the risers' board. Fresnillo led the way with a 44p hike
to 634p. Kazakhmys put on 70.5p to 811p and Eurasian Natural Resources
rose 70p to 860p.
The positive outlooked was shared in the continent, too. Markets in
Europe bounded along with the Footsie, and the Cac 40 in France and
Germany's Dax up shot up more than 2 per cent each.
There was more caution, however, ahead of tomorrow's UK second quarter
gross domestic product (GDP) figures, which will shed more light on the
timing and strength of any recovery on these shores.
Jimmy Yates, head of equities at CMC Markets, said: 'Friday now becomes more important as the UK GDP numbers are released.
'A weaker number here has the potential to derail the recent rally and bring things crashing down to earth."
Gains from financial firms and commodity stocks offset heavy falls in
the utility sector, as water firms were hit by regulator Ofwat's ruling
that bills must fall by 2015.
Severn Trent was the hardest hit, down more than 7 per cent, following the decision to see tariffs reduce by around £14 to £330 before inflation between 2010 and 2015.
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