FTSE 100 soars to 10-month high
Positive economic news and hopes of a global recovery boosted the FTSE 100 again today after the index soared to a ten-month high and smashed through the 4,900 mark.
The gains followed those seen in Asia earlier today, which were spurred on by Federal Reserve chairman Ben Bernanke’s comments last Friday.
Mr Bernanke’s comments came at a speech in the annual central bankers’ retreat in Jackson Hole, Wyoming, and said the prospects for economic recovery “appear good”.
Japan’s main Nikkei 225 index closed up more than 3%, while Hong Kong’s Hang Seng rose 2% and markets in Thailand and South Korea gained 1.8%, Taiwan and Australia were higher by 2.8%, and India was up by 2%.
Since mid-July, the FTSE has experienced continuous growth, and according to stock market historian David Schwartz: “The rally that we are seeing in July and August is merely an understanding that economic conditions are improving, which is not what we expected to see during the spring.”
Mr Schwartz is predicting the index will continue to rise for the next year before experiencing declines.
Meanwhile, global shares also received a boost due to the price of oil, which is now above $74 a barrel on the back of increasing demand.
This resulted in rises in BP, Royal Dutch Shell, BG Group and Cairn Energy, all adding between 0.3% and 1.3%.
In the meantime, the banking sector (which saw a battering in the midst of the financial turmoil) all saw gains with Royal Bank of Scotland, Lloyds Banking Group and Barclays rising between 2% and 5%.
Lloyds Banking Group performed particularly well after reports that it is in talks to offload its Clerical Medical Unit to Clive Cowdery’s Resolution.
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