FTSE 100 holds on for ten-day rally

Friday 24th July 2009

The FTSE 100 complete a ten-day rally today closing up 0.37 per cent.

Over the week the index was up over four per cent and since the start of last week it has gained 8.82 per cent.

The index ended the week up 13.17 points to 4,572.97.

Biggest gains went to London Stock Exchange rising 4.39 per cent, while 3i Group rose 3.85 per cent.

Lonmin rose 3.59 per cent, Standard Chartered was up 3.27 per cent and Vodafone climbed 3.12 per cent.

Pennon Group fell 4.99 per cent, Compass dropped 3.75 per cent and BAE Systems was down 2.73 per cent.

Morning positivity in London was tethered by New York opening with a drop.

The Dow Jones was down 0.27 per cent to 9,045.25 at 11:32 EDT (16:32 BST).

The US index was pulled down after recent bonhomie as Microsoft announced a 29 per cent fall in profits.

A more circumspect mood in the US spread to the UK and looked like bring to a close a ten-day rally – the longest stretch of daily gains since January 2004.

The index held on during the morning despite GDP figures showing the UK economy was contracting faster than forecast.

Tim Hughes, head of sales trading at IG Index, said: "The FTSE's impressive run this week has sparked speculation that the worst of the global recession may be past, but a chorus of dissent – suggesting that equity markets are looking severely overbought – has begun to make itself heard.

"Certainly the 4500 mark, a level that was pouring cold water over previous rallies, has not been a problem this time around. But investors will note these are still testing times for the economy at large."

He added when trading resumes on Monday there will be a strong temptation to book profits if there is a sense that this rally has finally run out of steam and the market looks set to turn on its heels.

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