Feed: Business Yahoo UK
Posted on: Friday, May 10, 2013 15:05
Author: Business Yahoo UK
Subject: FTSE extends winning run into seventh session, BT rallies
The FTSE 100 advanced on Friday, extending their winning run into a seventh straight session - led by telecoms group BT on robust results - with some traders forecasting more market gains to come. The FTSE 100 was up 40.74 points, or 0.6 percent, at 6,633.48 by 8:54 a.m., having risen 0.1 percent on Thursday to record its highest close since October 2007. The UK benchmark has risen around 12 percent this year as interest rate cuts and injections of liquidity by central banks around the world have lifted equity markets in spite of a stuttering global economy. "I still think the fundamentals (aren't good enough) to warrant the current stock prices, (but) the central bank intervention has more than offset that," Nick Xanders, head of European equity strategy at BTIG, said. "At some point that will give and the fundamentals will matter again, but it isn't today." BT jumped 8.8 percent, rebounding from a 2.3 percent drop on Thursday, as it raised its outlook after cost cuts and strong consumer demand helped it to beat annual forecasts. BofA Merrill Lynch, describing BT's results as "very strong", upgraded its rating on the stock to "buy". Trading volume for BT was strong, at around 90 percent of the 90-day daily average, against the index on just 13 percent. Positive earnings newsflow also gave TUI Travel a boost, with the tour operator adding 1.9 percent as it forecast a full-year profit rise of at least 10 percent. Panmure Gordon hiked its target price for TUI to 315 pence from 303 pence. While technical momentum indicators such as the relative strength index (RSI) show the FTSE 100 is in 'overbought' territory, strategists saw scope for more gains as investors continue to plump for equities over bonds due to better returns. "The index RSIs... now would argue for a bit of consolidation but I think the downside is really quite limited because of the asset allocation argument," Ian Williams, strategist at Peel Hunt, said. |
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