Why has the FTSE 100 index hit the 6000 level?
The recent drivers in the market have been numerous. Ongoing merger and acquisition activity, strong corporate earnings, the return of capital to shareholders in terms of dividends and buybacks, the strength of oil and commodity prices and even a tentative recovery in property prices have all added to the general feel good factor in the market. So is hitting 6000 actually important? There are those who will maintain that psychologically it is an important barrier and that is why there is often some resistance to breaching such a figure. The landmark is not important per se – whilst it is something which the headline writers will focus on, the most important factor is for investors to keep watching the stories, both sectorally and stock specifically. What is the difference between this peak and the last time 6000 was reached in 2001? The simple answer is earnings. In the intervening period companies have very much tightened their belts, undergone corporate restructures and cost cutting
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