FTSE hits three-month high on earnings relief

Britain's FTSE 100 share index leapt to a three-month high this morning.

Britain's FTSE 100 share index leapt to a three-month high this morning.

It was boosted by strong financial and media stocks as positive domestic and US earnings updates lifted optimism the economy is past its worst.

Shares in global news and information provider Reuters Group rose 8 per cent after the company's first-quarter results met expectations, relieving wary investors in media sector shares.

Retailer GUS added 4.4 per cent after forecasting annual profits at the top end of market expectations.

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The FTSE 100 was up 20.5 points this morning at 3937.30, putting the index on course for its fourth consecutive daily advance.

The FTSE hit an early peak of 3,967.8, its highest level since January 14th, after shares in US tech giants Microsoft and Intel rallied in after-hours trading as investors showed relief at their quarterly results.

"The US first-quarter results have been fairly good and removed a lot of the worries . . . the majority have either met or beaten expectations," one dealer said.

But another said the mood remained nervous. "The market is in danger of getting ahead of itself and the rally running out of steam as the trading news is still mixed.

BAE Systems, Tesco, Old Mutual, Exel, Friends Provident, Smith & Nephew and Hanson all slid over 1 per cent as their shares went ex-dividend, meaning investors no longer qualify for the latest dividend payout.

PA