FTSE rises on miners; Glaxo, Vodafone weigh
The FTSE 100 .FTSE closed up 19.3 points at 6,621.4, for a monthly gain of 2.7 percent.business Updated: Jun 01, 2007 04:36 IST
Britain's leading share index ended 0.3 percent higher on Thursday as firmer metal prices boosted mining stocks, but weakness in GlaxoSmithKline (GSK.L: Quote, Profile , Research) and Vodafone (VOD.L: Quote, Profile , Research) weighed on the market.
The FTSE 100 .FTSE closed up 19.3 points at 6,621.4, for a monthly gain of 2.7 percent.The FTSEurofirst 300 index of leading European shares rose to its highest close since December 2000.
"I get the impression that we are approaching the limit of how far markets can continue to rise," said Peter Dixon, UK economist at Commerzbank. "Obviously, markets everywhere are supported by M&A activity and here we are, five months of the year down, we have already achieved on a global basis two-thirds of last year's M&A totals."
The UK benchmark index has advanced 6.4 percent in the first five months of 2007, compared with a 1.9 percent gain over the same period last year.
Global markets suffered a sell-off in May and June last year as fears that commodity-fuelled inflation could spark potentially growth-crimping interest rate hikes.
"Equity markets generally, and the UK market is no exception, are fairly valued rather than extremely cheap. You have got to question how far they are going to rally," Dixon said.
Miners were the standout gainers, contributing 83 percent of the index's rise as firm metal prices and consolidation hopes attracted investors, traders said.