September 3, 2014 / 3:55 PM / 4 years ago

UK's FTSE rallies on signs of Ukraine peace moves

* FTSE 100 closes up 0.7 pct at 6,873.58 points

* Index had earlier hit new 2014 peak of 6,898.62 points

* Stock markets buoyed by signs of Ukraine peace moves

* Ashtead rises after lifting full-year guidance

* FTSE yet to get past 6,900 point mark

By Sudip Kar-Gupta

LONDON, Sept 3 (Reuters) - Britain’s top equity index touched its highest level in more than 14 years on Wednesday as signs that Ukraine and Russia were working to end the conflict in eastern Ukraine lifted global stock markets.

The blue-chip FTSE 100 index briefly hit 6,898.62 points, its highest level since early 2000, after Ukrainian President Petro Poroshenko’s press office said a “permanent ceasefire” had been agreed with Russia.

The FTSE edged back when the Kremlin later denied Russian President Vladimir Putin had agreed a truce with Poroshenko, saying Russia was not a party to the conflict, but said both leaders had agreed on steps towards peace.

But the index nevertheless closed up by 0.7 percent, or 44.41 points, at 6,873.58 points.

“With Russia, things are never black and white. There are some questions in the background about how solid this ceasefire actually is. But if a ceasefire can hold and is confirmed, then we could see a nice move higher,” said Dafydd Davies, partner at Charles Hanover Investments.


Industrial equipment hire company Ashtead was the best-performing FTSE 100 stock in percentage terms, rising 3.6 percent after the company raised its full-year earnings guidance.

However, financial advisory company Hargreaves Lansdown missed out on the broader market rally, falling 5.8 percent after its profit growth slightly missed market forecasts and it failed to reassure investors about the impact of new regulations.

The UK stock market rally was also helped by new signs of economic growth in Britain, with data showing that Britain’s services industry expanded last month at the fastest pace in nearly a year.

The backdrop of Britain’s economic recovery has led many traders to expect the FTSE 100 to hit a record high of 7,000 points later this year.

The FTSE has also been resilient in the face of uncertainty over Scotland’s vote later this month over whether or not to stay in the United Kingdom.

While uncertainty over the Scotland vote has hit the sterling currency, it has so far had relatively little impact on the FTSE, whose companies are often more exposed to the global economy than the domestic UK one.

However, the FTSE has not yet breached the 6,900 point level - seen as a key hurdle to cross before it can then move on to challenge record highs.

Both Davies and Beaufort Securities’ sales trader Basil Petrides said they would trade cautiously in the near term and look to sell positions for a profit when the market rose.

“I’d sell into rallies,” said Petrides. (Additional reporting by Atul Prakash; Editing by Susan Fenton and Andrew Heavens)

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