UK's FTSE holds steady near 5-1/2 year peaks

London — Britain's benchmark equity index steadied near its highest level in five-and-a-half years on Monday, helped by a rise in bank stocks, and most analysts expected further near-term gains.

 

The blue-chip FTSE 100 index was flat at 6,724.49 points in mid-session trading—steadying at its highest level since early 2008.

 

The FTSE 100 has risen some 14 percent since the start of 2013, as interest rate cuts and injections of liquidity by central banks have hit returns on bonds and driven many investors over to the better returns on offer among equities.

 

"I'm still quite cautiously optimistic," said JN Financial trader Rick Jones.

 

Jones expected the FTSE 100 to make further progress in the coming sessions up towards 6,760-6,800 but added that investors may then look to sell equities to lock in their profits on the stock market rally.

 

Jones said 6,760 marked a peak on the market in late 2007, after which the FTSE tumbled to 5,335 in the space of a few months as the 2008 global financial crisis hit the world economy.

 

EasyJet rises
 

Budget airline EasyJet topped the FTSE 100's leaderboard with a 4.3 percent gain, which traders attributed to a price target increase on the stock from investment bank Citi.

 

Partly nationalized Royal Bank of Scotland also benefited from an upgrade by Numis, rising 3 percent and helping the FTSE 350 Banking Index gain 0.3 percent to give one of the biggest lifts to the market.

 

CMC Markets analyst Michael Hewson said there was little to stop the equity market rally, since equities were providing better returns than bonds for investors.

 

"At the end of the day, if you're looking for a return on your money, where do you put it?"  — Reuters