Positive earnings boost Britain's FTSE 100
Upbeat corporate earnings helped nudge Britain's top shares into positive territory on Wednesday, with low-cost airline easyJet leading the way after a robust update.
The UK benchmark was up 13.41 points, or 0.2 percent, at 6,699.47 by 1101 GMT, pushing up to fresh 5-1/2 year highs.
Easyjet and exchange operator London Stock Exchange topped the FTSE 100 leader board after estimate-beating updates, notching up respective gains of 6.6 percent and 4.9 percent.
Traders said the positive earnings newsflow was very much the focus on a day otherwise marked by gloomy economic data from the euro zone where Germany's economy grew less than expected in the first quarter and France entered a shallow recession.
"The GDP backdrop is largely being ignored... given the fact that we're seeing continually strong corporate numbers," Matt Basi, sales trader at CMC Markets, said.
"I think this has been the case now for probably six to nine months that the macro picture is secondary to the earnings that we're seeing... and the fact obviously that central banks seem fairly content to throw more money into the market."
The FTSE has risen 7.6 percent in the past month as pledges of continued monetary stimulus from global central banks, and especially the U.S. Federal Reserve and European Central Bank, underpinned investor appetite for risk assets.
While technical momentum indicators such as the relative strength index (RSI) show the FTSE 100 is in 'overbought' territory, some fund managers see scope for more gains as investors continue to plump for equities over bonds due to better returns.
"The markets generally are actually looking quite good value still," Leigh Himsworth, fund manager of the UK Opportunities Fund at City Financial, said.
The FTSE 100 trades on a 12-month forward price/earnings ratio of 12.31 times and has a dividend yield of 3.9 percent, according to Thomson Reuters data.
A fall in the value of stocks trading without the attraction of their latest dividend, including supermarket chain Sainsbury and oil major Royal Dutch Shell exerted pressure on the index to the tune of 9.59 points. (Reporting by Tricia Wright, additional reporting by Francesco Canepa. Editing by Jeremy Gaunt.)
