FTSE hits 5000 for the first time this year

Nick Serff, Market Analyst, City Index commented: "European equity markets reversed earlier losses to finish with a rally of 1%. UK Trade figures this morning showed British exports accelerated in July coming in at -6.479b. This was the fastest monthly rise since the start of 2008, but slightly lower than analysts forecasted. However the market reversed early weakness to head higher and trade above 5000 for the first time since October 2008.

The travel and Airline sector is today's best performing area. British Airways continued its surge to new highs for the year on the back of Commerzbank upgrades for several stocks in its sector. Thomas Cook was the top index performer trading up nearly 7 percent. Traders had to cover short positions in Thomas Cook after Arcandor looked close to placing its stock.

It has been an important day for UK equities with the FTSE 100 briefly crossing 5000 for the first time this year. However, as soon as 5000 was breached we saw investors add short positions to their portfolios, signalling that a stay above 5000 may be short lived. With price action becoming choppy over the last few days it would not be a surprise to see some profit taking now, pushing the index back down to the 4920 area. However, if the upwards trend maintains with investors happy to buy from price dips, there seems little reason why the FTSE 100 cannot break even higher from these levels.