UK's FTSE edges up to hit new multi-year highs

Thu May 16, 2013 3:42am EDT

* FTSE edges up for 11th consecutive session

* Traders say near-term upside is limited

* Vedanta and Aviva top FTSE 100's leaderboard

By Sudip Kar-Gupta

LONDON, May 16 (Reuters) - Britain's benchmark equity index edged up to reach fresh 5-1/2 year peaks on Thursday helped by solid earnings from major companies, although some traders said further big moves higher were unlikely in the near term.

The blue-chip FTSE 100 index rose 0.1 percent, or 6.25 points, to 6,699.80 points in early session trading - marking the 11th consecutive winning session for the market.

Insurer Aviva and miner Vedanta led the FTSE's leaderboard after Aviva reported more business for the company while Vedanta posted higher profits.

The FTSE 100 has risen 14 percent since the start of 2013 to take the index to its highest level since early 2008, with world stock markets supported by rate cuts and injections of liquidity by central banks to help the global economy.

However, traders said they would not want to buy into the market at current levels as they expected it could have a minor pull-back in coming sessions.

"I think it is running out of potential upside in the near-term," said Central Markets chief strategist Richard Perry.

Technical analysis also pointed to the market being technically "overbought".

The FTSE 100 currently has a relative strength indicator (RSI) level of around 76. A reading above 70 indicates that an index is in technically "overbought" territory and EGR Broking managing director Kyri Kangellaris cautioned against buying new "long" positions at current levels to bet on more gains.

"The RSI is overbought and that's never a good sign to take fresh 'longs'. I'm still of the mind to take profits where possible," he said. (Editing by Toby Chopra)

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