London investors start hoping that the FTSE 100 stock index will push on past the symbolic 5,000-point mark, a threshold not breached since last year, analysts say. "Friday's continued rally by the UK stock market has helped to ease the nerves caused earlier in the week by the sharp drop in the FTSE," said Philip Gillet, a trader at IG Index.
"The sell-off earlier in the week does look like just a correction for now and the past couple of days have seen a chunk of the losses won back," he added. The FTSE lost 1.17 percent over this week to close on Friday at 4,851.7 points.
"The recovery for UK stocks still looks to be intact and 5,000 remains the next obvious target for the FTSE 100 when traders return next week," Gillet said. Analysts were also looking ahead to the outcome of this weekend's meeting of finance ministers from the G20 grouping of major economies in London, set to discuss cracking down on bankers' bonuses and the prospect of rolling back their financial crisis measures as a recovery shapes up.
London markets will watch out also for a monthly interest rate decision by the British central bank, the Bank of England. It is expected to hold its key rate at the record low of 0.50 percent where it has been since March.
Analysts at HSBC bank said however they did not rule out the bank tweaking downwards certain other interest rates such as those paid on deposits by commercial banks. A slew of economic indicators spread across the week will also be watched, including home loans data from the major mortgage lender Halifax and July industrial production data as well as trade and output figures. The supermarket chain Morrison's and retail group Kesa are due to release earnings statement on Thursday.
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