Reuters logo
FTSE extends longest monthly winning streak for 16 years
February 28, 2013 / 5:06 PM / in 5 years

FTSE extends longest monthly winning streak for 16 years

* FTSE adds 0.6 percent

* Top index rises for ninth month in a row

* Gains supporting by U.S. Fed comments, data

* IAG surges 7.9 percent after beating expectations

By Alistair Smout

LONDON, Feb 28 (Reuters) - Britain’s top share index rose on Thursday, extending its monthly winning streak to nine months, buoyed by assurances from U.S. and European central banks that they would continue to pursue supportive monetary policy.

The blue-chip FTSE 100 index closed 34.93 points higher, up 0.6 percent at 6,360.81, finishing up 1.3 percent on the month and extending its longest monthly winning streak since 1997.

U.S. Federal Reserve Chairman Ben Bernanke sparked a rally on Wall Street for the second day in a row on Wednesday after he defended the Fed’s asset purchases programme to the House Committee in Congress. European Central Bank head Mario Draghi issued a similarly “dovish” set of comments.

Bernanke’s testimony to the Senate on Tuesday evening had helped British stocks add 0.9 percent on Wednesday, recovering from sharp falls following a stalemate in Italian elections.

“It’s been good news for the bulls that the weakness we saw at the start of the week hasn’t lasted. We’ve seen some good data out of the US, and the doves are still clearly in control of the Fed,” Chris Beauchamp, market analyst at IG Index, said.

The number of Americans filing new claims for unemployment benefits fell more than expected last week, suggesting some traction in the labor market recovery, and revised GDP figures showed that U.S. growth was positive in the last quarter of last year.

“With the recent economic data being ahead of expectations and corporate data surprising to the upside, most of the dip buying we have seen has been led by long term investors,” said Atif Latif, director of trading at Guardian Stockbrokers.

“They still understand in the search for yield the equity market offers more upside than the negative real rate of return from the fixed income market.”

Year to date, the FTSE has gained 7.9 percent, with total returns (including dividend payouts) of 8.4 percent. However, foreign investors into British stocks have suffered at the hands of weakening pound, with sterling depreciating 6.7 percent against the dollar this year.


Aiding gains was a 7.9 percent rise in International Airlines Group, which topped the blue-chip leader board, after its 2012 operating loss of 68 million euros ($89.14 million) came in better than consensus.

Rik Thakrar, senior dealer at Spread Co, says his clients remain buyers of IAG, and clearly anticipated further gains.

“Willie Walsh stated that the company intends to continue with its large scale restructuring plan, thereby diverting much of its resources to more profitable routes,” he said.

Banking stocks notched up solid gains on the central banks’ reaffirmation of a dovish stance. Royal Bank of Scotland was the notable exception after disappointing results from the part-nationalised lender.

RBS shed 6.6 percent, among the top FTSE 100 fallers, after the bank made a pretax loss of 5.2 billion pounds, hit by a 4.6 billion charge for losses on the value of its own debt.

Copper miner Kazakhmys was the top faller, dropping 8.6 percent after warning it could be forced to take a charge estimated at over $1.5 billion on the value of its holding in Kazakh peer ENRC. (Additional reporting by David Brett; editing by Ron Askew)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below