FTSE 100 to hit 8,000 in 2014, says Citigroup
Bank analysts say return of 'animal spirits' in boardrooms will help UK market break record
The FTSE 100 will break its previous record high and hit 8,000 by the end of next year, according to market strategists at Citigroup.
Experts at the bank believe a revival of so-called "animal spirits" in company boardrooms will spur a pick-up in merger and acquisition activity and help push up share prices, according to the Daily Telegraph.
Yesterday the FTSE closed at 6,570, meaning the value of Britain's blue-chip companies would have to rise nearly 22 per cent in the next 15 months to hit 8,000.
Citigroup believes that as fears of a eurozone break-up recede, and bank balance sheets and corporate earnings continue to improve, investors' appetite for equities will increase.
The FTSE 100 hit its highest level, 6,930, in 1999 at the height of the dotcom bubble. Last May it came within 90 points of that figure.
Earlier this month, Old Mutual Global Investors' new head of UK equities, Richard Buxton, said the UK market was set for a prolonged period of higher returns and predicted the FTSE 100 would reach record levels. However, he forecast that the index would only reach around 7,000, the Financial Times reports.
"I have already said I think we are through the worst and I stand by that," Buxton said. "We are in for a much better period in the UK." ·