Markets to flourish in 'sweet spot' after Scotland's no and Ukranian ceasefire
THE FTSE 100 is on course for a record high by the end of the year as a wall of cheap central banks' money and lower political risks provide a "sweet spot" for financial markets.
Strategists believe the relief rally which greeted Scotland's "no" vote will kickstart an upward march in equity prices as an improving economy leads to healthier corporate earnings.
The UK's blue chip index hit a closing record high of 6930.2 at the end of 1999. It closed up 18.6 at 6837.9 yesterday and Barclays strategist Ian Scott forecasts it will hit 7250 by the end of 2014.
This is now a sweet spot for markets, especially given the backdrop of reduced Ukrainian tension
He said: "The big picture is the mounting evidence of an upturn in earnings estimates. For banks these are rising for the first time in more than a year and the improvements already made in domestic UK economic fundamentals suggest this has further to run."
Nick Beecroft, senior market analyst at Saxo Bank, said shares would be driven higher by global money-printing.
"The Bank of Japan is flooding the markets with money and the ECB is moving inexorably toward quantitative easing. I therefore now expect a full explosion of animal spirits with the pound and dollar flourishing. This is now a sweet spot for markets, especially given the backdrop of reduced Ukrainian tension."