FTSE 100 hits a yearly high on cheery earnings season

THE FTSE 100 broke through the 4,500 level yesterday as it rose for the ninth straight day on the back of positive economic data and a rally in banks and miners. The index rose by 66.07 points, or 1.5 per cent, to 4,559.80, the highest closing level since early January, having touched a high of 4,566.77 earlier in the session.<br /><br />Investors cheered reassuring quarterly results, including from 3M, and US home sales data.<br /><br />&ldquo;(The FTSE&rsquo;s gains are) down to not only momentum from US stocks, but all the economic data out today has been bullish, positive for stocks, ever since retail sales in the UK came out better than expected earlier this morning,&rdquo; said Angus Campbell, head of sales at Capital Spreads.<br /><br />US government data showed claims for jobless benefits rose last week, roughly in line with expectations, while continuing claims for the previous week edged lower.<br /><br />Mining stocks dominated the leaderboard, rebounding after Wednesday&rsquo;s falls, against a backdrop of mixed metals prices. <strong>Kazakhmys</strong> was the biggest FTSE 100 riser, up 9.5 per cent, with <strong>Eurasian Natural Resources Corporation</strong>, <strong>Vedanta Resources</strong>, <strong>Xstrata</strong> and Lonmin up 5.5 to 8.9 per cent.<br /><br />Energy stocks were also firmer, reversing losses from earlier in the session, as crude prices rose, buoyed by gains in the gasoline market and a rally on Wall Street.<br /><br /><strong>Royal Dutch Shell</strong>, <strong>BG Group</strong>, <strong>Tullow Oil</strong> and <strong>Cairn Energy</strong> added between 0.1 and 1.4 per cent.<br /><br />Banks were also in demand, following a retreat in the previous session, with <strong>HSBC</strong>, <strong>Standard Chartered</strong>, <strong>Royal Bank of Scotland</strong> and <strong>Lloyds Banking Group</strong> up between 3.2 to 5.3 per cent.<br /><br />Water utilities were the greatest drag on the blue chips, under pressure after regulator Ofwat ordered a four per cent cut to household water bills over the next five years, and said it would allow companies to make a return on their capital at the low end of expectations.<br /><br /><strong>Pennon Group</strong>, <strong>Severn Trent</strong> and <strong>United Utilities</strong> fell between 3.4 and 7.3 per cent.<br /><br />Caterer <strong>Compass</strong> was off 7.5 per cent, the biggest faller on the index, after it said sales growth slowed in the third quarter and looked set to weaken further.<br /><br />&ldquo;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,&rdquo; said Jimmy Yates, head of equities at CMC Markets.<br />