London’s blue chip share index paused for breath yesterday while still continuing its longest run of gains for four years.
The FTSE 100 Index closed ahead for the eighth session in a row at 4493.73 – 0.28 per cent up – in a rally that has seen the top flight gain nearly nine per cent.
The Footsie has now bounced back by 28 per cent since its year-low on March 3, when the financial crisis and recession saw it tumble to just over 3500.
Its latest bounce back has come on the back of better-than-expected corporate earnings news on both sides of the Atlantic and economic recovery hopes.
In London on Tuesday, retail giants Next and Morrisons raised profit forecasts for the year in a sign of returning consumer confidence.
In the United States, stocks were given a push by further strong corporate trading reports, while figures overnight from technology giants Apple and Yahoo have likewise been well-received.
The Dow Jones Industrial Average in the US also secured its seventh day of gains on Tuesday, closing up by almost one per cent.
A strong start for America’s bank reporting season has added to the positive sentiment, also boosting confidence here ahead of the UK banking results.
The FTSE 100 eased back a little in early trade yesterday as the market looked to take some profits following the strong rally, leaving it down 5.4 points at 4475.8, before a late recovery.
Despite the four-year record rally, the index has failed to break the 4500 barrier and may yet struggle to move above the level while the economy is still in a fragile state and with many more big companies to report, according to City Index market strategist Joshua Raymond.
He said: “The rally we have had has been amazing, but the fact it has yet to break through 4500 shows that investors are still not overly confident.
“Investors have been taking advantage of stock market movements on the back of earnings results, but as soon as it nears 4500, they’re happy to take their profits.”
He added that low volumes of trading in the summer months has also exaggerated the market movements.
While mining stocks have been seeing strong advances amid the rally, many of the major players were in the red yesterday as investors looked to lock-in gains.
Banks and insurers were also easing back, with Lloyds Banking Group and RBS both down.
Figures due out this week from other major blue chips may also provide direction, as will Friday’s keenly awaited official UK economic output figures for the second quarter.