By Ben Harrington Published: 8:48PM BST 22 Jul 2009  The blue-chip index rose for an eighth day in row after a Federal Housing Finance Agency report showed US house prices unexpectedly rose in May.  The last time the blue-chip index did so well was when it rose for eleven consecutive days in a row over the New Year period at the end of 2003 and the beginning of 2004.  Bearish comments from leading equity strategists, such as Morgan Stanley's Jason Todd, weighed on London's leading index in morning trade.  The FTSE 100 fell by as much 30 points after Mr Todd advised clients to sell into the recent rally. "We think the key drivers behind improving sentiment – upside to near-term growth estimates and continued positive earnings momentum – may prove more transitory than the market believes," said Mr Todd.  But the US housing report and a strong start on Wall Street helped the FTSE 100 close up 12.56 points to 4493.73.  There had been an expectation that US house prices would drop 0.2pc but the report showed from April average house prices in America gained 0.9pc.  The positive sentiment also helped the FTSE 250 surge 51.47 points to 7794.05.  Shire topped the FTSE 100 amid renewed hopes it will see a better than expected uplift in sales after Genzyme Corp, a major US competitor, lowered its 2009 earnings projection.  In June, Genzyme halted production of its Fabrazyme pill, after finding a virus at its manufacturing plant. Fabrazyme – a treatment for a rare genetic condition – is a direct competitor of Shire's Replagal drug, which provides about 6pc of revenues.  Although Genzyme said the impact from the shutdown had a minimal impact on this quarter's results, the anticipated revision to its full-year 2009 earnings projection came in below already-lowered estimates. Shire climbed 33 to 866½p. Water utilities were in demand ahead of Ofwat's decision on how much money water firms can make between 2010 to 2015, which is due on Thursday. United Utilities gained 6¼ to 502½p, Pennon perked up 10¾ to 507½p and Severn Trent rose 21p to £11.13. Analysts at Nomura believe investors in water companies have been too pessimistic ahead of Thursday's decision on pricing.  Tullow Oil was a strong performer as traders chewed over the implications of a Macquarie note. On Tuesday, the Australian broker raised its 12-month price target on Tullow Oil by 40pc to £14.00, arguing it expects the company to unveil further positive updates on new oil discoveries throughout the year. Cairn Energy also rose despite a falling oil price. The company put on 51p to £24.35.  Other risers included Smith & Nephew. The shares perked up 11 to 460¼p as fears over the impact of swine flu on the company's business receded.  Telecoms giant Vodafone made it onto the leaderboard, climbing 1.1 to 114.8p. On Wednesday, Vodacom, in which Vodafone has a stake, said total revenue rose 12.2pc for the three months to June to and mobile users grew 19.5pc to 41.3m. However, revenue at Vodacom's international mobile unit dropped by 8.1pc for the first quarter to the end of June.  Banks, though, were under pressure following poor earnings statements from US rivals and news that bad loans are increasing. Morgan Stanley posted a third straight quarterly loss and Wells Fargo, America's fourth-biggest bank, said non-performing assets, or bad loans, had jumped. Investors were also spooked by talk of possible capital shortfalls – which was suggested by JP Morgan on Tuesday – and news from National Australia Bank, which owns Clydesdale and Yorkshire, that bad debts had risen sharply at its UK operations. Lloyds Banking Group shed 1.14 to 72.3p and Barclays almost took the wooden spoon, losing 9.7 to 299.6p.  Miners were sold off after BHP Billiton gave a cautious outlook for global demand for metals as part of its quarterly production report. Even though the company said production has risen for 12 major commodities, including coal and copper, its shares slid 27½p to £15.02. Analysts said the figures for iron ore had were below expectations. Elsewhere in the sector, Lonmin retreated 37p to £11.36 and Kazakhmys fell 16 to 740½p.  Supermarket groups were hit by a bout of profit taking following their strong performances on Tuesday. Wm Morrison shed 4¾ to 269¼p and J Sainsbury dipped 3¼ to 322¾p.  Among the second liners, Car parts maker GKN had another strong day on the back of a push from Merrill Lynch. Celine Fornaro, analyst at Merrill Lynch, said: "Better-than-expected second-half results and positive outlook statements released by Autoliv, Faurecia, Conti and some US suppliers support our Buy case on GKN with 55pc automotive exposure."  GKN also said that 95pc of its shareholders had supported its recent fund-raising, which was carried out to cut the engineering group's debt by raising £423m. The rump – or remaining 39m shares – were placed in the market at 90p each. GKN jumped 6 to 94½p.  But pub company Marston's slipped 2¾ to 88¾p after it achieved a worse take up for its rights issue: 91pc of investors signed up for Marston's cash call. Brokers placed the remaining 25m shares at 85p each. Marston's lost 3¾ to 88¾p.  Among the small caps, film distribution company Entertainment One was a talking point with roughly 7pc of the company's shares traded. Some hedge funds, such as GAM, Deephaven, Bluecrest and Morgan Stanley, are thought to have sold out of the stock, clearing a significant overhang. Last month, Evolution published a "buy" note on the company with a price target of 125p. The shares rose 1¾ to 23¾p.
The FTSE 100 recorded its longest winning streak since January 2004, which is    when some traders believe the last bull market began.