Market overview: FTSE 100 hits new five-year high



LONDON (ShareCast) - 1630: Close The FTSE got the week off to a great start, hitting a new five-year high, led by Admiral Group (LSE: ADM.L - news) after Goldman Sachs (NYSE: GS-PB - news) upped its view on the shares from 'neutral' to 'buy' and hiked its price target from 1,160p to 1,500p. Meanwhile, Meggitt (Other OTC: MEGGF - news) was heading the other way after being identified as the ultimate owner of a company which provided battery charger units for Boeing (NYSE: BA - news) 's now grounded Dreamliner air fleet. In economic news, new year sellers increased asking prices by just 0.2 per cent - around 440 pounds - in the first two weeks of January, according to property website Rightmove (LSE: RMV.L - news) . Meanwhile, footfall in December was 1.2% lower than a year ago on the UK High Street, a poorer performance than the 0.4% rise seen in the previous month, according to data out today. The FTSE closed up 27 points at 6,181, just one point off its intraday high.

1541: The FTSE 100 has extended gains and is now trading near at its intraday high, up 25 points on the day at 6,180. 'Despite fairly low volumes due to a US holiday, Europe's markets have continued to edge higher with the FTSE 100 (FTSE: ^FTSE - news) hitting a new five-year high, helped by the absence of any meaningful economic or other data related news flow,' said Senior Market Analyst Michael Hewson from CMC Markets. 'It seems likely that investors are happy to sit on their hands for now ahead of some key economic data out later this week.'

1530: A good day for the yen, which has strengthened against all 16 of its major counterparts. This follows a 13% in the currency against the dollar in the past three months. The reason: policy makers at the Bank of Japan have sat down to work on ways to boost the country's economy. It is widely expected there will be further asset purchases announced by but the government is pushing for a new two per cent inflation target too.

1522: Aggreko (LSE: AGK.L - news) is falling after a downgrade out of analysts at Bank of America (Other OTC: BACYL - news) .

1517: The medium-term outlook [for the FTSE 100] has improved recently due to the confirmation from the S&P 500, which has now posted fresh multi-year highs of its own. Over this time scale we can see how the S&P 500 has moved back to within touching distance of its all time highs, again highlighting the extremely strong bullish phase posted since 2008, and the positive impact of quantitative easing (QE1), QE2 and QE3. The longer term concern is what happens when the QE support is removed and we return to an interest rate hiking cycle. "For the medium term though the outlook remains solid with the UK looking set for a move to its 2007 highs," say technical analysts at Cantor Capital. Technical analysts at Charles Stanley (LSE: CAY.L - news) take a similar view, writing today to clients that: "the magnitude of the break strongly suggests that this leg of the rally still has further to go." FTSE 100 up 21 to 6,175.

1402: The rise in shares of RBS (LSE: RBS.L - news) is being attributed by some to a Sky News report that the lender plans to split its markets and international banking division into separate units. FTSE 100 up 18 to 6,172.

1332: The FT's Alphaville is today commenting on the latest Morgan Stanley (Xetra: 885836 - news) brand survey. This showed that "This year, there is a clear trend towards gifting more modestly-priced top luxury goods." We believe this supports our thesis that entry-level/premium brands, particularly within watches, are best placed to outperform in China in 2013, the broker said. Its key pick remains Swatch. Burberry did quite well in the rankings.

1215: Analysts at Investec (LSE: INVP.L - news) have lowered their price target on shares of Pearson (NYSE: PSO - news) to 1,190p from 1,240p.

1042: Prime Minister David Cameron will deliver his speech on the UK's EU membership on Wednesday, Downing Street has announced.

1024: French luxury goods maker Richemont has today announced that sales in the latest quarter were flat in the Asia Pacific region, even if that follows on several years of exceptional growth, in particular in China. To be had in account are the demanding comparative figures for the same quarter last year. As well, wholesale sales growth was lower than in the first six months and in the comparative period due to the cautious approach taken by the Group's retail partners in Hong Kong and mainland China. Its stock is now down by 6 per cent, the most of any within the DJ Stoxx 600 and weighing on peers such as Burberry.

0855: Analysts at Goldman Sachs have upped their view on shares of Admiral to buy from neutral, while at the same time raising their price target on its shares to 1,500 from 1,160 before. As an aside, it may be worth keeping tabs on the 0.84 level in the Euro/Sterling cross. The pair is 'oversold' but markets are watching it. The FT Money yesterday called attention to what might happen should haven flows to the UK be significantly reduced. FTSE 100 up 15 to 6,170.

0820: The UK equity benchmark has begun the day slightly higher, led by gains in shares of Admiral and IAG. The latter has been upgraded to outperform (although Citi has downgraded it to neutral, from buy). Pearson is the worst performer now on the Footsie, after forecasting a flat operating profit for 2012. It has taken over from Meggitt, which has taken a hit from the heavy news flow (Bloomberg, FT, Times) regarding the Boeing 787s woes. More specifically, The Times apparently referenced a 2006 article over the weekend regarding a November (Xetra: A0Z24E - news) 2006 fire at Securaplane Technologies, which supplies the B787 battery charger unit (BCU). Securaplane was acquired by Meggitt in 2011. Nevertheless, analysts at Jefferies are this morning stressing to clients that "we emphasise that nobody yet knows what caused the electrical fires on the Boeing 787 that resulted in the grounding of the aircraft. We are aware, however, that attention has focused on the aircraft's Lithium-ion battery pack and upon the process of re-charging the pack." FTSE 100 up 21 to 6,175.