FTSE up fourth day but rally may end soon
BRITAIN’S main share index rose for the fourth consecutive day yesterday on hopes of new measures to tackle Europe’s economic crisis, although traders said the rally could be short-lived due to persistent fears over the region’s debt troubles.
The benchmark FTSE 100 closed up 34.80 points, or 0.7 per cent, at 5,391.14 points – its highest close in a week.
A recovery in heavyweight mining stocks, which have fallen sharply in recent weeks, boosted the overall index and offset weaker banking stocks, with Royal Bank of Scotland and Lloyds falling on fears of the sector’s exposure to the troubled economies of Greece and Spain.
However, trading volumes on the FTSE 100 were at just 79 per cent of their average 90-day volumes. Dealers said this indicated investors’ reluctance to buy equities due to the ongoing uncertainty over the Eurozone debt crisis.
“We need a much clearer direction from politicians. It’s making it very hard to trade,” said EGR Broking managing director Steven Mayne.
Traders said the market rally had been sustained by renewed speculation that the European Central Bank (ECB) would take steps to support the region’s banks.