LONDON (Reuters) - Britain’s blue-chip share index hit an eight-month high early on Wednesday, with a break through a key resistance level opening the door to further gains on the back of a brighter global economic outlook and solid corporate earnings.
The FTSE 100 .FTSE was up 19.88 points, or 0.3 percent, at 5,975.44 points by 4.48 a.m. EDT, just below a peak at 5,980.18 -- its highest intra-day level since July and breaking through key technical resistance around 5,964 from a previous high.
The U.S. Federal Reserve upgraded its outlook on economic growth to “moderate” from “modest” on Tuesday, feeding into a brighter mood among investors following strong data and approval of a long-awaited bailout package for Greece.
“The main thing is to clear that significant 6,000 number, the futures got to within (a few) points. If we clear that psychological number hopefully we’ll press on from there,” said Richard Curr, head of dealing at Prime Markets.
“A lot of people are thinking things are turning around (on the economy) ... When you look at the overall numbers (on corporate earnings) coming out, they are generally pretty good, and that’s true across the other side of the Atlantic as well.”
The FTSE 100 was on track for its sixth straight session of gains -- its best run since last summer. The index held above the 6,000 mark for much of the first half of 2011 before a steep sell-off in August.
Financial stocks -- the second biggest sector in the FTSE 100 after energy companies -- were among the main gainers on Wednesday, taking heart from news that most large U.S. banks passed their annual stress tests.
Legal & General (LGEN.L) topped the risers board, up 5 percent after boosting its dividend -- an increasingly key driver for investors looking for alternative sources of steady income at a time of ultra-low government bond yields -- on the back of a rise in profit.
“The highlight is the 35 percent rise in the dividend to 6.40 pence, which is still 2.25 times covered by net cash and more than two times covered by operating earnings per share,” analysts at Oriel said in a note.
“Given previous guidance about allowing dividend cover to fall to approach two times, this bodes well for future increases, over and above underlying earnings growth.”
Fellow insurer Prudential (PRU.L), which posted solid earnings on Tuesday, added 3 percent.
Only a third of British blue chips’ results have missed forecasts, while in the euro zone some 56 percent have done so, according to Thomson Reuters StarMine data.
Companies going ex-dividend were expected to take around 6.86 points off the FTSE 100 on Wednesday, with the most impact coming from HSBC (HSBA.L).
Editing by Dan Lalor