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Footsie smashes through 7,000 mark

The FTSE 100 Index climbed above the 7,000-mark today for the first time in its history.

It came as world markets were buoyed by a small recovery in the price of oil as well as hopeful signs over the Greek debt crisis.

London's top-flight index has also been lifted in recent days by the prospect of UK and US interest rates remaining lower for longer.

The index had been on the cusp of the landmark after soaring to new highs in the previous session, following on from a Budget-inspired rally earlier in the week.

It comes just weeks after the FTSE breached an all-time high that stood for more than 15 years, since the dotcom era at the end of 1999.

Today it rose as high as 7018.2 points as the price of a barrel of Brent crude - still less than half its value last summer - edged above 55 US dollars.

The rise boosted heavyweights Royal Dutch Shell and BP - a staple of many UK pension funds - by about 1%, with exploration firm Tullow Oil climbing nearly 3% and rival BG Group 2% up.

Sentiment was also boosted by hopes that Greece will agree to reforms to stop it running out of money following the debt-laden nation's latest talks with the European Union.

Meanwhile, this week has seen signs from the US Federal Reserve that it is in no hurry to raise interest rates while the Bank of England has signalled caution on rate hikes in the UK amid the threat of persistent low inflation.

Top climber on the FTSE 100 today was UK-listed Irish building supplies firm CRH, which added 6% after France's Lafarge and Switzerland's Holcim said their £5 billion mega merger was back on.

To satisfy regulatory concerns CRH had agreed to buy Lafarge Tarmac in the UK, but a hitch with the larger deal earlier this month had also put the CRH purchase on hold.

The announcement that TSB had agreed to a £1.7 billion takeover by Spain's Banco de Sabadell helped shares in state-backed Lloyds - which is selling its 50% stake in the lender - add nearly 1%.

TSB shares also rose but as a constituent of the second-string FTSE 250 Index it did not contribute to the top-flight's landmark.

Peter Cameron, assistant fund manager at Ecclesiastical Investment Management, said: "After 15 long and bumpy years, the FTSE 100 has finally clawed its way back to the levels of the late 1990s and unlike then, when the market was gripped by an irrational technology bubble, this new high should not cause alarm amongst investors.

"A backdrop of inflation tailwinds from declining food and fuel prices, falling unemployment and signs of wage growth finally returning, create a benign outlook for the UK economy in 2015.

"Improving economic activity within the eurozone, our largest trading partner, will also act as a tailwind, as should recent comments from the Bank of England which indicate interest rates may stay lower for even longer than investors expect."

The FTSE 100 later peaked at 7024.2 before a setting a new record close at 7022.5.

The top-performing stock at the close was mining giant Anglo American, up 5% as metals prices rose.

Other commodities shares also surged, with Glencore also up 5% and Fresnillo and BHP Billiton each ahead by around 4%.

Richard Hunter, head of equities at Hargreaves Lansdown, said: "It is pleasing to see the psychological barrier of 7000 reached at last.

"The fact that the FTSE 100 is now some 7% ahead in the year to date is a sign of ongoing optimism from investors, despite the wider challenges being faced."

Guy Foster, group head of research at Brewin Dolphin, said: "The FTSE 100 has finally breached the hurdle of 7,000 some 15 years after it was first expected.

"The final ascent came as investors pushed back their forecasts for interest rate increases further.

"As we pass this latest milestone no doubt some will feel it marks a frothy top to the equity market rally but with inflation low and policy loose there is every indication that we are still at the mid-point in the current investment cycle."

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