FTSE touches record high as central banks stay dovish

Britain's benchmark share index reached record highs on Thursday, with gold miners outperforming, after the US Federal Reserve and Bank of England both dampened prospects of interest rate rises in the near term. The FTSE 100 index rose as much as 0.5 percent to a record high of 6,982.79 points, beating the earlier record of 6,974.26 points set on March 2. It closed 0.3 percent higher, up 17.12 points at 6,962.32.
Traders said the FTSE was supported by dovish comments from Bank of England official Andy Haldane, as well as Wednesday's Budget, where finance minister George Osborne announced modest increases in the forecasts for Britain's 2015 and 2016 economic growth.
Sterling fell to the day's low against the dollar, sending the FTSE 100 higher after Bank of England Chief Economist Andy Haldane said the chances of an interest rate rise or cut were evenly balanced.
"Haldane has been dovish, and the presence of that sort of a voice in the Bank of England is significant. Along with the Fed, central banks are continuing to be supportive," Jasper Lawler, market analyst at CMC Markets, said.
"We are struggling to rise above the 7,000 level, however."
The FTSE's rise tracked similar gains on other world stock markets after the Fed's statement late on Wednesday.
The Fed dropped the word "patient" when it described its outlook for raising interest rates, as expected. But it also downgraded its views on the economy and inflation and lowered its interest rate trajectory. That signalled a more gradual approach than many investors had foreseen.
Gold and silver miner Fresnillo rose 5.4 percent, the biggest gain in the FTSE 100. Rival gold miner Randgold rose 3.2 percent.
The mining companies benefited from an increase in gold prices after the Fed statement. The Fed's cautious tone pushed the US dollar down on currency markets, making gold more attractive.
However, clothing retailer Next fell 4 percent after the company's cautious outlook undercut a 12.5 percent rise in annual profits. The stock rose to a record high on Wednesday.
BESI Research analysts kept a "sell" rating on Next but others remained upbeat about Next's prospects.
"A history of innovation, coupled with a strong macro environment, means Next remains a robust stock for investors," said Ketan Patel, senior analyst at Ecclesiastical Investment Management, which owns Next shares.