UK blue chips hit highest close since summer 2008

Renewed market optimism saw the UK benchmark hit 5,600 points for the first time since August 2008

Holly Cook 5 March, 2010 | 5:23PM
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The FTSE 100 index breached 5,600 points on Friday and closed just shy as banks and miners attracted investors, with confidence bolstered by fewer than expected job losses across the pond.

The UK benchmark has had a strong week, pushing it back to levels seen at the beginning of the year, and has risen 4.6% over the past five trading session. The FTSE 100 index closed 72.5 points or 1.3% firmer on Friday at 5,559.7, while the FTSE 250 index added 104.5 points or 1.1% to 9,769.8—a climb of 4.5% on the week. It’s likely that next week investors will be looking to see whether traders opt to cash in profits following the recent run or if they have the nerve to hold tight.

In the US, consensus had been for job losses in the month of February to amount to as much as 50,000 as snow storms took their toll. As such, a confirmed drop in non-farm payrolls of ‘just’ 36,000 last month was well received. Once again, the largest number of job losses came from the construction industry.

Back in the UK, Schroders was once again in the top spot after yesterday’s funds under management figures. Shares in the firm, which was revealed yesterday to have regained its crown as the country’s largest asset manager, closed 6.7% ahead.

Other financials such as Asia-facing bank Standard Chartered, insurer Aviva and fund manager Man Group were also in demand, each rising 3.5%, 3.2% and 3.1%, respectively.

And miners also rebounded. After Schroders, the next five top climbers on Friday were all metal extractors, including Xstrata and Fresnillo, which took on 5.6% and 4.2% apiece.

On the earnings front, publisher WPP ticked up 3.5% after management accompanied the preliminary results with upbeat-sounding comments regarding revenue growth and margins in 2010. The shares had initially slipped into the red amid a knee-jerk reaction to weaker-than-expected 2009 numbers.

With market sentiment on a high, defensives such as utility providers United Utilities and Centrica and pharma firm GlaxoSmithKline shed between 1.6% and 0.5%.

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Holly Cook

Holly Cook  is Manager, Morningstar EMEA Websites

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