FTSE rally is not done with

FTSE is trading in green today, up 0.50% today so far, trading at 7054. In previous post "Don't give up on FTSE yet" dated 3^rd March 2015, index was recommended as a buy and it is still expected that the rally is yet not over with.

Previous arguments -

• UK GDP remains strong. Latest data after the post suggests economy grew 3% in fourth quarter yearly basis.
  
  
• Services sector remains very strong. Bank of England (BOE) recently won a litigation against European Central Bank (ECB) over Euro denominated derivatives clearing. ECB will now provide Euro liquidity to UK banks via BOE.
  
  
• Weaker pound against dollar makes valuations cheaper. Pound weaken further since last post, now trading at 1.46 against dollar.
  
  
• ECB QE will benefit FTSE sto
  cks. That is still believed to be the case.

New arguments -

• As per Markit intelligence, foreign investors increased their exposure to UK stocks. Latest data suggests investors poured in $1.5 billion in the first quarter towards UK exposed ETFs. Flow is largest since at least 2006.
  
  
• Possibilities are high that Bank of England (BOE) will provide some form of dovish signals after the election, either in form of rate cut or longer extension of current accommodative stance. Asset purchase might also be increased by £25 billion to €400 billion.

However, investors should maintain guard as volatilities are set to rise over upcoming election and FED driven policy uncertainty.