Equities lifted by raft of positive news
Rising oil and stronger German economy move FTSE 100 closer to all-time high
London’s rise followed a record breaking advance on the S&P index which scaled a new intraday high today, helped by investor optimism on Greece and Ukraine and upbeat German growth data.
The key London benchmark closed up 45 points at 6,873, just 57 points shy of the 6,930 record set on the final trading day of 1999. Barring any significantly bad news the index could surge through the 7,000 barrier next week.
Shares have been helped by a range of positive news. Mark Carney, governor of the Bank of England, yesterday suggested interest rates are unlikely to rise until next year, while the price of Brent Crude today pushed through $60 a barrel for the first time this year as a report showed supply from the US had fallen.
That gave a lift to oil companies such as Tullow, while drugs giant GlaxoSmithKline was helped by the more positive data from Europe. The Eurozone economies reported growth of 0.3% for the last three months, with Germany rising by a better than expected 0.7%. Markets have already responded positively to the quantitative easing programme announced by the European Central Bank.
Chris Beauchamp, at IG Index, said: “Reports of the death of the eurozone economy have been greatly exaggerated. GDP figures from across the currency union were much better than expected. Germany fulfilled its traditional role as the engine of growth, with a quarter-on-quarter improvement of 0.7%, more than double expectations.”
US markets are also in upbeat mood. Over the week, the Dow Jones is up 1.1% , the S&P 500 has risen by 1.8% and the Nasdaq by 2.5%.
Scott Colyer, chief executive of Colorado-based Advisors Asset Management, said: “Investors have been very cautious, overly so in equities, over the past month or so. That seems to be mostly attributable to overseas risks. Those risks are coming off the table this week.”
He noted the overall strength in US earnings growth despite the strong dollar.