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

Business & Markets 2013
Written by Reuters
Thursday, 16 May 2013 15:57
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LONDON (May 16): 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. - Reuters