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LONDON, March 11 (AFP): Britain's stock market will look to stay above 5,900 points next week after closing above the key level Friday for the first time in almost five years.
On Friday, the FTSE 100 index of leading shares closed at 5,907.9 points, a gain of 0.84 per cent or 49.2 points from the previous week. It had last finished above 5,900 points on June 8, 2001.
The FTSE 100, which began the year at just under 5,620 points, has been supported during the first quarter by strong earnings news and takeovers involving British companies.
On Monday the FTSE hit an intra-day high of 5,924.50 points following forecast-busting record annual results from global banking giant HSBC.
It breached 5,900 points for the first time since June 2001, also after German engineering conglomerate Linde announced an 8.2-billion-pound (11.9-billion-euro, 14.4-billion-dollar) takeover of British industrial gas group BOC. The FTSE stumbled later in the week on concerns over borrowing cost levels, before rallying late Friday.
"Investors have been spooked by higher interest rate expectations, predominantly in the US but also Japan," said ABN Amro equities analyst Ian Richards.
"Looking forward to the next few weeks, months I think you will start to see investors refocus on the fundamentals from European equity perspective.
"We are still in a low interest environment, let's be clear about that," he said, adding that current equity valuations still offered appeal.
Richards said that company mergers, stock buybacks and increased capital expenditure-factors which had driven the markets higher over the last six-to-nine months-"have a lot further to play out".
"You can still paint a pretty bullish picture once we get beyond this short-term fixation on adjusting expectations for interest rates," he added.
The Bank of England had Thursday decided to keep British interest rates at 4.50 per cent for the seventh month in a row.
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