Reuters: Hot Stocks: Britain's FTSE scales new 5-1/2 year peaks

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Britain's FTSE scales new 5-1/2 year peaks May 20th 2013, 08:46 Mon May 20, 2013 4:46am EDT * FTSE 100 up 0.2 percent * EasyJet buoyed by Citi target price hike * Bank, pharma sectors lead market higher By Tricia Wright LONDON, May 20 (Reuters) - Britain's top share index rose to fresh 5-1/2 year peaks on Monday, spurred on by robust economic data from the United States and Japan, with technical analysts anticipating further near-term gains. The FTSE 100 was up 16.29 points, or 0.2 percent, at 6,739.35 by 0822 GMT, not far from an intraday peak of 6,754.10 reached in 2007, a resistance level for the index and a near-term target for a number of technical analysts. Craig Erlam, analyst at Alpari, reckoned the index could break that level this week, setting his next target at 6,838, a high in September 2000 which sees as attainable in the next few weeks. The U.S. Dow and S&P 500 finished at new record peaks on Friday after estimate-beating economic data and Japan's Nikkei surged to a 5-1/2 year high on Monday as Tokyo raised its assessment of the country's economy for the first time in two months. EasyJet was the standout gainer on Monday, ahead 4.6 percent, with traders citing the impact of a target price hike from Citi - to 1,330 pence from 1,210 pence - in the wake of recent first-half results from the low-cost airline. Peer Ryanair posted forecast-beating full-year earnings on Monday. While technical momentum indicators such as the relative strength index (RSI) show the FTSE 100 is in 'overbought' territory - with the 14-day RSI at its highest since Jan. 2013 - further gains are in sight as investors continue to opt for equities over bonds due to better returns. "What's to stop it?" Michael Hewson, analyst at CMC Markets, said, referring to the equity market rally. "At the end of the day, if you're looking for a return on your money, where do you put it?" The hunt for investment returns was indicative in good gains for the pharmaceutical sector, which has a dividend yield of 3.1 percent, according to Thomson Reuters data. Banks also rose as investors took advantage of their valuations, with the sector trading on a one-year forward price/earnings ratio of 11.25 times, against the FTSE on 12.36 times. (Reporting by Tricia Wright; Editing by Toby Chopra) Link this Share this Digg this Email Reprints

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