London Report: BSkyB drives up FTSE for a sixth consecutive day

BRITAIN’S top share index ended higher yesterday, helped by a surge in media group BSkyB, although investors were underwhelmed by a temporary fix to the United States’ debt issues.

The blue-chip FTSE 100 index closed up by 0.1 per cent, or 4.57 points, at 6,576.16 points to mark its sixth straight session of gains.

BSkyB was the top blue chip winner, jumping 7 per cent to its highest level since early 2001 after posting an increase in revenue.

The market, however, had spent much of the day in negative territory on disappointment over the US debt deal.

US lawmakers’ last-minute agreement secured funding only until Jan. 15, which raised the likelihood of another round of political brinkmanship.

“Having jumped out the way of one oncoming train, the US has merely jumped into the path of another, although this one is slightly further down the tracks. Widespread disapproval of this avoidance tactic can be seen in the negativity that has engulfed equity markets and covered traders’ screens in red,” said Alastair McCaig, market analyst at IG.

Still, many traders continued to forecast a strong end to the year, arguing that signs of economic recovery and reasonable company results would continue to support equities.

Psigma Investment Management chief investment officer Tom Becket expressed disappointment with the US debt deal but nevertheless bet on more gains for the equity market.

“Despite the fears that we hold over US politics we still believe that equity markets are likely to rally into the year end. Global economic momentum is accelerating and we expect corporate results to be broadly supportive, although they won’t be spectacular,” he said.

The FTSE is up nearly 12 per cent since the start of 2013.

The index has failed to regain a 13-year high of 6,875.62 points reached in late May, but JN Financial trader Rick Jones expected the FTSE to finish 2013 in the 6,900-7,000 point range.

Toby Campbell-Gray, head of trading at Tavira Securities, also felt fund managers still had little choice other than to buy equities given the higher returns on offer compared with bonds, whose yields have been driven down by central bank injections of liquidity.

“Fund managers cannot afford to miss the rally,” he said.