FTSE heads for record rise

The City will be watching closely today to see if the FTSE 100 can match its record of 11 days in a row of gains and perhaps even go one further and set a new mark of 12. The index rose 16.81 points to close at 4,576.6 on Friday for its tenth daily gain in a row and a upwards move of over 10 per cent since its first day of rises. The gains are already bigger than when the previous 11 day runs were seen in 2004 and 1997.

The continued strength on Friday came even after the government released poor GDP data. The figures showed that the UK economy shrank by 0.8 per cent in the second quarter, meaning an overall contraction of 5.6 per cent in the year to June. Analysts expected a fall of 0.3 per cent but even that disappointment was not enough to derail investor optimism.

Continued strength in US shares and a number of positive performances by UK companies like Vodafone - up by three per cent on Friday - helped the pre-weekend gains and Asian stocks reacted on Monday with a tenth day of gains themselves. The strength pushed futures prices up, meaning the FTSE 100 is set to open 38 points higher. And trading is likely to be supported by stronger US new home sales which analysts are expecting to hit their highest level for four months, stoking optimism that the real estate slump is levelling off.

The bears will point to global debt and job losses as reasons for the recent gains being unlikely to continue indefinitely. Certainly much of the good corporate news is now factored into markets.

WHAT THEY WERE SAYING:Robert Parkes, equity strategist at HSBC, in the Independent: "There may be longer-term concerns, such as the possibility of lower growth rates in the developed world, but our focus is the next three to six months. On this horizon things feel far better now than at the start of the year."

Matt Riordan of Paradice Investment Management in Sydney on Bloomberg.com: "Earnings have come in ahead of expectations and the economic data is quite reasonable. It’s given people encouragement that we’re moving into a recovery phase." ·