FTSE breaks through psychologically important 6,000 barrier ... but only just

THE FTSE-100 index of leading shares burst through the 6,000 mark yesterday just minutes ahead of the close, though it was unable to hang on above the benchmark figure as the trading day ended.

Closing at 5,996.07, it has risen by 8.5 per cent this month alone and is now at a two-and-a-half year high as the index has shrugged off crises in Greece and Ireland and continuing uncertainty surrounding the banks.

Its rise is seen as a sign of corporate recovery even though it is not representative of the British economy as its constituent members make two-thirds of their profits overseas.

Keith Skeoch, chief executive of Standard Life Investments, who predicted it hitting 6,000 by the year end, said: "Rising corporate profits and reduced fears of double dip recession have driven the rally in the second half. We expect the positive momentum will be maintained in 2011.

"Continued global economic recovery and UK equities' high exposure to overseas earnings will deliver another year of strong cash flow and earnings growth for UK corporates."

He believes the blue-chip index could hit 6,900 next year, although that would still be below the all time high of 6,950.6 on 31 December 1999.