FTSE to trade near current levels at year-end

By Jonathan Cable

LONDON (Reuters) - Britain's FTSE 100 index of leading shares will trade around current 12-month highs at the end of 2009 and will see only a very modest rise by mid-2010, a Reuters poll showed on Wednesday.

The quarterly poll of around 20 strategists, taken over the past week, gave median forecasts for the FTSE 100 .FTSE to be at 5,150 by the end of this year, little changed from a close of 5,159.72 on Tuesday but marking a 16 percent rise since the start of the year.

The index of firms from banks to miners to technology firms is seen lifting gently to 5,250 by the end of June.

"A correction is overdue but this market doesn't look as if it wants to go down. Looking forward to next year we're not going to be raging bulls," said Allan Collins, head of investment strategy at brokers Redmayne Bentley.

The last poll, taken in June, forecast the FTSE ending this year at 4,600 and forecasts in the most recent poll ranged widely from 4,100 to 5,500 but none saw a return to March lows.

The FTSE sank 31 percent last year as global markets plunged in the face of a financial crisis that sent major economies into recession. The slump came after an 11 percent rise in 2006 and a more modest 3.8 percent rise in 2007.

The index hit a six-year low of around 3,460 in March but has since rebounded around 50 percent as earnings have surprised to the upside and the economy crawls out of recession.

"Profits are going up. All the sectors are seeing profits rise, pretty much across the board. Earnings momentum is starting to improve as you would expect as we enter a recovery period," said Darren Winder at Cazenove.