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FTSE powers to a six-month high

Friday, September 14 11:49:37

Britain's FTSE 100 burst through key technical resistance levels to hit its highest in nearly six months today, with heavyweight miners, banks and builders cheering news of fresh economic stimulus from the U.S. Federal Reserve.

The Fed pledged after European markets closed on Thursday to pump an extra $40 billion a month into the U.S. economy, which has become an increasingly important market for UK corporates as much of Europe languishes in recession.

Export-orientated miners were the top gainers, adding some 36 points to the FTSE 100, as prospects for stronger economic growth in the world's biggest economy were seen translating into more demand for metals.

"A lot of equity investors have probably been too risk averse and this is the sort of event that prompts people to perhaps re-think their risk exposure and that's what you are seeing in the market," said Richard Jeffrey, chief investment officer at Cazenove Capital Management.

"The risk is that markets become over exuberant and assume that we are heading back to growth rates that we saw pre the economic and financial crisis."

By 1013 GMT, the FTSE 100 was up 90.49 points, or 1.6 percent, at 5,910.41, having earlier climbed as high as 5,911.70 points - its strongest since March 27.

Strategists at Credit Suisse said that companies with high dividend yields, quality growth stocks and house builders should be among the top beneficiaries from the Fed's quantitative easing. In the UK, their top picks included Wolseley, which added 5.8 percent on Friday.