Footsie equals record trading run

The FTSE 100 clawed its way into positive territory yesterday to maintain its winning run and equal its record. It closed 9.5 points higher at 4,586.1, for its 11th successive gain in as many trading days. The run has taken the index 10.6 per cent higher in all, a bigger move than when it last performed the feat in 1997 and 2004. If it were to stage a rise again today a twelfth rise would set a new record.

Pushing the index up yesterday were Pearson, with a 12.1 per cent gain after it reported strong earnings results in the first half and Lloyds Banking Group with a 6.9 per cent move. Also contributing strongly were miners, which benefited from broker upgrades. However the index was still trading in negative territory minutes before the close and only finished up after a strong last-gasp move.

The Footsie is not alone in its record-breaking run. The Dow Jones has been staging a recovery in New York in recent weeks and in Tokyo the Nikkei 225 Stock Average has been on its best run for more than 20 years. Companies around the world have been seeing earnings recoveries and investors have bought back into markets as the threat of financial meltdown have receded.

Most analysts and economists are now expecting improvements in the word economy, including even previous bears like Nouriel Roubini who forecast the financial crisis. So much so that even the UK’s worse than expected GDP numbers on Friday and the threat of swine flu have failed to dent the Footsie’s serene progress.

WHAT THEY ARE SAYING:David Buik, marketing director of Cantor Index in the Independent: "We have seen a lot of results in the US that have been quite good. I think markets now really do believe we will see a recovery. It seems there is still a lot of money sloshing around out there and an increased appetite for risk."

Jeremy Warner in the Daily Telegraph: "In Britain and the US, the latest leg of the rally since March lows is as much caused by the closing out, or hedging, of short positions as anything else. The upswing of the past few weeks has also been achieved on the back of quite low volumes. There's no great rush by investors to buy. Indeed, fund managers who are unambiguously bullish remain thin on the ground." ·