Top shares rose Thursday as investors welcomed robust corporate earnings newsflow, with Royal Bank of Scotland
Peer Lloyds Banking Group
Solid earnings gave Capita
The upbeat outlook statement also supported peer Serco Group
The mood was brightened by the key Ifo survey showing business sentiment in Germany -- the strong link in Europe -- rose to a seven-month high.
Further positive newsflow on the global economy came from the United States, where new claims for unemployment insurance held at the lowest level since the early days of the 2007-2009 recession.
Equity markets have got off to a strong start in 2012, with the FTSE 100 in striking distance of the 6,000 level on better than expected macroeconomic data, particularly in the United States, and more encouraging newsflow on the euro zone.
Yet analysts have wide ranging views on the sustainability of the rally, in which the UK blue-chip index has advanced 6.6 percent so far this year.
Nick Nelson, strategist at UBS, reckons equities could be set for a pause as it becomes more difficult for economic numbers to beat expectations -- which have been lifted over recent months by analysts encouraged by a string of more positive releases.
The bar has been raised in terms of the numbers for all sorts of macro data -- U.S. payrolls, the ISM, they have to be even better now, partly because expectations have risen, Nelson said. It's also the case that tactically, the market looks quite stretched in terms of the move we've seen, he added.
The UK benchmark <.FTSE> closed up 21.34 points, or 0.4 percent, at 5,937.89.
Steve Larkins, head of sales trading at Seymour Pierce, argued the market is poised for a correction of between 200 and 300 points.
We are subject to the biggest concerns about growth in Europe, that's got to be concerning for everybody ... Reality needs to set in, the market seems to ignore these things at its peril.
(Additional reporting by Toni Vorobyova; Editing by David Holmes)