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Banks lead FTSE to highest close since late 2000
May 20, 2013 / 7:15 AM / 5 years ago

Banks lead FTSE to highest close since late 2000

LONDON (Reuters) - Britain’s benchmark equity index rose on Monday to its best closing level since late 2000, helped by rising bank stocks, and analysts said there was little holding it back from its all-time highs.

The London Stock Exchange building is seen in central London September 24, 2009. REUTERS/Stephen Hird

Interest rate cuts and injections of liquidity by central banks have hit returns on bonds, driving investors to seek the better returns on offer from equities, spurring a global stock market rally over the last year.

The blue-chip FTSE 100 index closed up by 0.5 percent, or 32.57 points, at 6,755.63 points - its highest closing level since September 2000.

Germany’s DAX and the U.S. Dow Jones Industrial Average have already hit record highs this year, and IG analyst Brenda Kelly said the next target for the FTSE 100 could be its record intraday peak of 6,950.60 points in December 1999.

Securequity sales trader Jawaid Afsar also said there was little to hold back the FTSE.

A trader works on the trading floor in London January 22, 2010. REUTERS/Stefan Wermuth

“It’s grinding higher, and there’s no real selling pressure. Everyone keeps trying to call the top of the market but any wobble is another occasion to buy into it. The momentum is still bullish,” said Afsar.

Part-nationalised lender Royal Bank of Scotland led the FTSE leaderboard with a 4.5 percent gain, which traders attributed to an upgrade on the stock by broker Numis.

RBS’s rise enabled the UK banking sector to advance 0.9 percent, which gave one of the biggest lifts to the FTSE 100 which has risen 14.5 percent since the start of 2013.

EGR Broking managing director Kyri Kangellaris said some investors may look to sell equities in order to book profits on the rally so far this year at the 6,850 point mark - a level at which the FTSE hit a high in 1999 before then falling sharply as the Internet bubble burst at the start of 2000.

“I still think people should look to take profits,” he said.

additional reporting by Tricia Wright; editing by Ron Askew

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