FTSE surges past 6,200

The FTSE passed through the psychologically important 6,200 earlier today - last reached in January 2008 just before the financial crisis came to a peak.

FTSE surges past 6,200

Adrian Lowcock, Senior Investment Manager at Hargreaves Lansdowne, said the rally since the start of the year has been driven by relief that the US addressed some of the issues around the fiscal cliff and improving economic data from the US and China.

Last night the US suspended the borrowing limit until May 2013 and in China confidence amongst managers is at a two year high – HSBC claimed preliminary readings of the purchasing managers’ index increased to 51.9 in January.

“We have been in a period where markets have been very volatile and sentiment changes from risk averse to willing to invest and take risks,” said Lowcock. “This recent rally seems to have more behind it with the US implementing unlimited quantitative easing and linking interest rates to unemployment.”

He said Europe saying it will do anything to protect the euro has also given the US some room to manoeuvre.

“The improved outlook for the US, particularly in housing, and China which looks to have avoid a hard landing all contribute to a much more positive outlook for the year and so far looks more sustainable,” added Lowcock.

But he warned that sharp rises in markets are often followed by periods of sideways movement and profit taking.

And he said: “Given the current state of countries’ debt and general weakness in economies investors should be prepared for markets to remain volatile as there are still a lot of things that need to be resolved, we are not out of the woods yet.”


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