Morning:
14°c
The FTSE 100 index today set the record of the strongest quarterly performance as investors flooded back into shares following the chaos of the financial crisis.
Top stocks have risen 22% between July and September, with the Footsie adding 7.23 points to 5166.95 today.
The rally has added £217 billion to the value of the UK's 100 biggest listed companies.
On 1 July, the index of top stocks started the day at 4249.1 points.
This rally beat the previous best performance of the markets in the dotcom mania of 1999 when shares gained nearly 15% in the fourth quarter as investors piled into technology, media and telecoms stocks.
This time, banks and miners, the index's heavyweights, have been among the biggest winners: with Lloyds Banking Group rising 54%, Royal Bank of Scotland adding over a third and Barclays gaining almost a third during the quarter.
Copper producer Kazakhmys has shot up by 62%. But flag carrier British Airways was the biggest beneficiary, rocketing 78% in the three months.
The leading shares index is still 4.7% lower than it was just over a year ago, before the collapse of Lehman Brothers.
“The market was oversold,” said David Buik, senior partner at BGC Partners. “There was so much uncertainty after Lehman Brothers, which put the whole market to the sword. Because the market came off the best part of 40%, investors realised it had gone too far.”
However, there are plenty of analysts who now think the current appetite for shares is irrational.
They point to further similarities with the dotcom boom, particularly the massive increase in the numbers of retail investors buying shares.
Members of the public flooded the market with cash in the hope of riding the rally in 1999 but most lost nearly all their investments when the tech bubble burst after the FTSE 100 peaked just shy of 7000.
The FTSE 100 index was set up in 1984.
