Investors will wait with baited breath today to see if the stock market can equal its best-ever run of 11 consecutive days of gains, although some fear the market may be getting ahead of weak conditions in the UK and global economy.
The FTSE 100 closed at 4,576.6 on Friday night, marking 10-consecutive days of rises and a 10.9 per cent uplift since the start of its journey north. While a further rise today will equal the 11-day continuous rises seen in 2003 and 1997, the gains in the index over the last 10 days are already a record. The FTSE 100 has never before risen for 12 consecutive days.
The rise continued last week unabated despite official data showing the UK economy shrunk by a worse than expected 0.8 per cent in second quarter, taking the contraction over the year to June to 5.6 per cent. The City has largely attributed the 10-day run to buoyant US second-quarter corporate earnings over the last two weeks. For instance, the banking giant Goldman Sachs last week posted record earnings up by 65 per cent to $3.44bn (£2.1bn) in the second quarter. However, the recent spike in the FTSE has been characterised by low-trading volumes and some investors believe there could be a partial sell-off when traders return after their holidays. But Robert Parkes, the equity strategist at HSBC, is said to expect the rally to continue. He said: "There may be longer-term concerns, such as the possibility of lower growth rates in the developed world, but our focus is the next three to six months. On this horizon things feel far better now than at the start of the year."Reuse content