Britain's FTSE 100 risesComment on this story
London - Britain's benchmark equity index hit fresh five-year peaks on Wednesday lifted by expectations of more monetary stimulus to help the economy while results from drinks-can maker Rexam boosted its shares.
The blue-chip FTSE 100 index was up by 0.4 percent, or 25.55 points higher, at 6,404.62 points by around midday - its highest level since early 2008.
The market extended earlier gains after minutes from a Bank of England meeting showed a greater likelihood of monetary stimulus measures, which have boosted equity markets around the world.
Traders said the fact the FTSE 100 had managed to rise and stay above 6,400 points - a level at which it has previously lost ground - was a bullish signal pointing to more gains in the near-term.
“The market will now try to look at the upside. There are no signs of exhaustion in this rally,” said Hartmann Capital trader Basil Petrides.
“There's a lot of money parked in the sidelines slowly moving into the stock market.”
Can maker Rexam topped the FTSE 100 leaderboard after posting higher profits and increasing its dividend, with Bank of America Merrill Lynch analysts keeping a “buy” rating on the stock.
However, insurer RSA slumped 13 percent after slashing its dividend, dragging down other insurers such as Aviva, which fell 3.2 percent.
Securequity sales trader Jawaid Afsar said the FTSE 100 could rise by another 50 points to around the 6,450 mark.
However, he added he would not want to buy stocks at these levels since many strategists and investors expect a near-term pull-back after the market's strong start to 2013.
The FTSE 100 has risen around 9 percent since the start of 2013, beating its 6 percent gain over the whole of 2012.
Afsar said he would look to book profits by 'shorting' the market, or betting on future falls, if it rose much higher.
“If the market continues to go higher, I would be looking for opportunities to 'short' the market,” he said. - Reuters