FTSE hits fresh five-year high as data cheers

LONDON REPORT

THE FTSE 100 ended up 47.91 points, or 0.7 per cent, at 6,529.41, its highest close since late 2007, after better than expected US weekly jobless claims data.

Some bet on more gains from the index, up almost 11 per cent this year and around six per cent shy of an all-time closing high of 6,930.20 set in December 1999, months before the dot-com bubble burst.

“Overall the trend from a technical point of view looks healthy and upwards ... I don’t think it’s beyond the realms of possibility that the FTSE could hit an all-time high some time this year,” said Angus Campbell, head of market analysis at Capital Spreads.

Gerard Lane, equity strategist at Shore Capital, meanwhile, said: “In the back of my mind, I’ve got 7,000 for Christmas, but I wouldn’t be surprised if we see a big shake-out before then, partly because we inevitably do,” he said.

Financials led the risers, with good gains seen from Prudential, up

2.7 per cent, as yield-hungry investors continued to snap up shares in the insurer which ramped up its dividend by a bigger-than-expected 16 per cent on Wednesday.

Retailers were also in favour. Britain’s fourth-biggest grocer WM Morrison added 1.7 per cent after raising its dividend by 10 per cent and announcing talks with online grocer Ocado over an online food operation.

Ocado, which has been the talk of bid rumours involving Morrisons and is one of the most shorted stocks on the FTSE indexes, also reported a strong rise in recent sales and jumped 23.7 per cent, the standout midcap gainer.

Britain’s biggest household goods retailer Home Retail rose 12 per cent after it hiked its profit forecast for the second time in 2013.

Aggreko topped the blue-chip leader board, up 6.9 per cent to 1,941.3p in trading volume at one-and-a-half times the 90-day daily average after striking a deal to supply power to EDM in Mozambique and NamPower in Namibia.

Shares in the temporary power provider have had a torrid time since the company issued two profit warnings at late last year and remain well below the highs of around 2,400p seen last September.

Mike van Dulken, head of research at Accendo Markets, said the update gives additional support around the 1,820-1,850p level after the recent bounce, and the possibility of further contracts could help with a return to 2,100-2,400p. “In the absence of additional contracts, bulls would do well to note, however, potential resistance at the 200-day moving average (around 2,050p) and the trendline of falling highs from September (around 2,100p),” he said.