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FTSE rallies on hopes for Ukraine peace

Wednesday, September 03 17:12:59

Britain's top equity index touched its highest level in more than 14 years today as signs that Ukraine and Russia were working to end the conflict in eastern Ukraine lifted global stock markets.

The blue-chip FTSE 100 index briefly hit 6,898.62 points, its highest level since early 2000, after Ukrainian President Petro Poroshenko's press office said a "permanent ceasefire" had been agreed with Russia.

The FTSE edged back when the Kremlin later denied Russian President Vladimir Putin had agreed a truce with Poroshenko, saying Russia was not a party to the conflict, but said both leaders had agreed on steps towards peace.

But the index nevertheless closed up by 0.7 percent, or 44.41 points, at 6,873.58 points.

"With Russia, things are never black and white. There are some questions in the background about how solid this ceasefire actually is. But if a ceasefire can hold and is confirmed, then we could see a nice move higher," said Dafydd Davies, partner at Charles Hanover Investments.

Industrial equipment hire company Ashtead was the best-performing FTSE 100 stock in percentage terms, rising 3.6 percent after the company raised its full-year earnings guidance.

However, financial advisory company Hargreaves Lansdown missed out on the broader market rally, falling 5.8 percent after its profit growth slightly missed market forecasts and it failed to reassure investors about the impact of new regulations.

The UK stock market rally was also helped by new signs of economic growth in Britain, with data showing that Britain's services industry expanded last month at the fastest pace in nearly a year.

The backdrop of Britain's economic recovery has led many traders to expect the FTSE 100 to hit a record high of 7,000 points later this year.

The FTSE has also been resilient in the face of uncertainty over Scotland's vote later this month over whether or not to stay in the United Kingdom.

While uncertainty over the Scotland vote has hit the sterling currency, it has so far had relatively little impact on the FTSE, whose companies are often more exposed to the global economy than the domestic UK one.

However, the FTSE has not yet breached the 6,900 point level - seen as a key hurdle to cross before it can then move on to challenge record highs. (Reuters)

For more, visit www.businessworld.ie