FTSE climbs for sixth day on optimism over US earnings and stress test hopes
BRITAIN’S top shares climbed for the sixth consecutive session yesterday, led by banks on optimism that US peers would post strong earnings and lift the sector, and that Europe’s lenders would pass a key stress test.
The FTSE 100 closed 104 points, or two per cent, higher at 5,271.02, hitting its highest close in over two-weeks, having rallied over 9.5 per cent since the index hit its 2010 low on 1 July. “There’s a bit optimism creeping in about the earnings numbers,” said Phil Roberts, chief European technical analyst at Barclays Capital.
“The doom and gloom stopped at the half-year end. There was a lot of position-squaring … and from that point on the market has recovered.”
However, the index had further technical hurdles to clear, he added.
“It’s not yet in the clear on its top-side, it’s not yet above its 200-day moving average – 5,322 points — and still below its June high so there’s still significant resistance to be overcome.”
Banks were the biggest blue-chip gainers, lifted by hopes that important US banks reporting over the remainder of the week, including JP Morgan, Citigroup and Bank of America, would show the sector in good health.
Support for the sector also came from a report German banks were set to pass a European stress test to assess their financial health.
Among banks, Barclays was the best sector performer, up 4.3 per cent, while Royal Bank of Scotland and Lloyds Banking Group took on 3.9 and 2.6 per cent, respectively.
Integrated oils were higher, led by a 2.9 per cent gain for BP as hopes grew it could cap the Mexico oil spill.