FTSE to touch 6,300 in 2011, finds survey

 
City A.M. Reporter
BRITAIN’S FTSE 100 is seen gaining more than eight per cent by the end of 2011, with equity investors shrugging off economic gloom, a Reuters poll, published yesterday, found.

The median forecast of 19 equity strategists indicated the FTSE 100 would rise to 5,950 by mid-2011, up 2.4 per cent from its close on Tuesday of 5,808.45, and up 8.5 per cent by the end of the year.

The median estimate was almost unchanged from a September poll for mid-2011. Forecasts for this period ranged from 5,000 to 6,500, highlighting the uncertainty on whether European debt problems and a vulnerable economy could hit equities.

“Eurozone stability is key to index performance over the coming months,” Martin Dobson, director at Westhouse Securities, said.

“With the US more than likely to supply more quantitative easing, the focus is on whether further bailouts will be required in the Eurozone.”

The FTSE peaked in 2010 at 5,902.11 on 9?November, but quickly fell away as Ireland became the latest Eurozone nation to become embroiled in a sovereign debt crisis.

Out of 12 common contributors, eight upgraded their mid-2011 targets, while four downgraded theirs from the last poll in September.

Forecasters in the same poll taken a year ago called the FTSE’s 2010 performance about right – they said it would rise just over seven per cent, compared with actual gains of 7.31 per cent so far this year. The FTSE 100 has gained around seven per cent in 2010 and is 21 per cent higher since hitting its 2010 low on 1 July, and is forecast to reach 6,300 by the end of 2011 as investors focus on the ability of companies to grow profits.