FTSE rises to near nine month closing high
Blue-chip FTSE 100 closed up 0.1% at 5291,63 points on Monday.
LONDON - The FTSE 100 index rose to its highest closing level in nearly nine months on Monday, with many traders betting that worries over Italy would fail to halt a traditional year-end equities rally.
The blue-chip FTSE 100 closed up 0.1 percent, or 7.23 points higher, at 5,921.63 points.
This is its highest close since finishing at 5,961.11 points on March 19, 2012.
The FTSE initially fell after Italian Prime Minister Mario Monti said over the weekend that he planned to resign.
The announcement increased political uncertainty in the heavily indebted country and probably brought forward elections to February.
However, it then pared those losses and gained ground after breaking through and holding above the technically important level of 5,910 points - a level where it had previously tended to fall back.
Traders said fund managers would still look to put money in equities before the year-end, with stocks offering better returns via dividends than cash or sovereign bonds, where returns have suffered with interest rates at historic lows.
JN Financial senior trader Rick Jones said he would use any fall in the market to buy shares on the cheap, since he expected the FTSE could end 2012 at 6,000 points.
"I do think there's a bit of a magnet pulling the market towards 6,000 points," he said.
Stockbroker Killik & Co expected the FTSE to end 2013 at 6,500 points, despite the euro zone debt crisis and worries over the U.S. "fiscal cliff" - a potential combination of tax rises and spending cuts in the U.S. - and the risk of a slowing Chinese economy.