PRODUCT PROFILE

Latest Dublin Prices

FTSE volatile but holds 5 year highs

Friday, March 15 09:50:45

Britain's top share index was flat today, holding around five-year highs, with trading likely to be choppy heading into options and futures expiries later in the session.

The FTSE 100 was down 2.80 points at 6,526.61 by 0901 GMT, pegged back by a retreat from banks, having risen 0.7 percent on Thursday after better-than-expected U.S. weekly jobless claims data.

The index was on course to post its fifth consecutive week of gains, although trade could be volatile on Friday ahead of futures and options contract expiries at 1015 GMT, dubbed 'triple-witching'.

"(It's) quarterly expiry in the UK today and all shorts have thrown in the towel or are about to," said Lex van Dam, hedge fund manager at Hampstead Capital, which manages around $500 million assets.

"The question is, at what point will large institutional investors such as pension funds be forced to buy as well?"

Some bet on more gains from the index, up almost 11 percent this year and around 6 percent shy of an all-time closing high of 6,930.20 set in December 1999, months before the dot-com bubble burst.

Credit Suisse has raised its year-end FTSE 100 target to 7,000 from 6,600, while lifting its target for the S&P 500 - which on Thursday took a run at its record closing high of 1,565.15, but ended just 2 points away - to 1,640.

Positive analyst comment boosted a number of shares on Friday.

British Airways owner International Airlines firmed 2.8 percent as Morgan Stanley added the firm to its Europe best ideas list, while an upgrade to "buy" from Jefferies helped send chip designer ARM 2 percent higher.

Aggreko, Thursday's top blue-chip riser on an unexpected deal to supply power to Mozambique and Namibia, extended gains, up 1 percent as Deutsche Bank lifted its rating on the stock to "buy".

The bank, which raised its 2014 and 2015 earnings per share estimates by 3 percent and 7 percent to reflect the power deal along with slightly faster top-line growth, said its forecasts could prove conservative "given the headroom for share buybacks and acquisitions, as well as the potential to win sporting event contracts".

In a day otherwise quiet day on the corporate earnings front, Rentokil jumped 10.2 percent, hitting a two-year high and leading midcaps higher, as the cleaning to pest control firm unveiled better than expected full-year results.

Oriel Securities, which has a "hold" stance on the stock, said the earnings report was "a pleasing outturn", adding the outlook statement was robust.

While some investors are optimistic about the outlook for equities, emboldened by improving economic data from the United States and the fact a strong trend is in place, they could be tentative at these levels.

"No one wants to get caught in a bull-trap, chasing the market higher," said Autochartist analyst James Hyerczyk, noting that short-term traders are watching 6,534 on the 1,440 minute chart, the high for the week and near the January 2008 top, wanting to be sure there will be a follow-through to the upside ( C ) Reuters