FTSE hits 6300 on strength in financial stocks

<p>The FTSE 100 hit 6300 on Monday as investors continued to trade on the front foot in the new trading week, with strength in financial […]</p>

The FTSE 100 hit 6300 on Monday as investors continued to trade on the front foot in the new trading week, with strength in financial stocks giving a heavyweight lift to the UK Index.

The FTSE 100 was trading at 6300, with a gain of 17 points or 0.3%, going into the close on Monday, outperforming broader European trade, where the DAX lost 19 points.

The FTSE 350 banking sector rallied 1% on the day, with stocks such as Barclays, Aberdeen Asset Management and HSBC all giving a heavyweight lift to the UK benchmark index. Barclays’ shares were the outperformer on the day, rallying straight to the top of the FTSE 100 leader board with gains of 2%. The banking sector has seen enthusiastic buyers continue to emerge following last week’s news that banks will repay crisis loans back to the ECB early, boosting confidence in the sector.

A storming report of US durable goods also set a positive tone on the data front for a week that sees the FOMC conduct a two-day policy meeting, US Q4 GDP and non-farm payrolls.

Right now the momentum to the upside for global equities and the FTSE 100 in particular is undeniable. It is becoming harder and harder for investors to go against this trend for fear of missing out of further moves to the upside and this is all playing into the hands of bull market enthusiasts. The FTSE 100 has gained 6.8% so far this year to date, that’s already more than the entirety of last years’ gains and all within the space of less than a month.

US durable goods orders grew by 4.6% in December, much higher than expected and showing confidence from US companies that US growth would soon pick up. The data is even more of a surprise as it comes in at a  time when the US faced uncertainty over fiscal cliff debt talks, which went to the wire. It therefore raises the question that if confidence is this high, with such a bullish start to the markets already in 2013, how much more confident are US companies now?

In conflict with the risk appetite theme, however, were mining stocks, which fell broadly on the day despite the positive tone to trading. Stocks such as Evraz, Fresnillo and oil firm BG Group all traded to the downside.

Home Retail suffered heavy declines of 6.8%. The retailer saw its guidance from Morgan Stanley downgraded today, with the bank cutting its rating on the stock to underweight, from equal rate.

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