FTSE 100 hits all-time record close of 7,901.8
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The FTSE 100 closes at an all-time high of 7,901.8, as US job growth and hopes that interest rate hikes will slowly fuel a wave of market optimism
The FTSE 100 reached an all-time high of 7,906.58 today before slipping back to a record high of 7,901.8.
The UK’s leading blue chip index has been threatening to break its previous daily record of 7,903.50 set in 2018 for several weeks now.
It also ended above its previous closing price of 7,877.45 after forecast US jobs numbers boosted hopes that the world’s largest economy will avoid a recession and coupled with investors’ hopes that rate hikes are on the verge of to stop.
The FTSE 100 ended up 1 percent or 81.64 points, though the domestic-focused 21.23 ended at 20593.46.
New record: The FTSE 100 reached an all-time high of 7,906.58 today
On Wall Street, the Dow Jones rose 32.62 to 34,086.56 as the London markets closed. The German DAX lost 32.76 points to 5,476.43, but the French CAC 40 rose 67.67 points to 7,233.94.
A pound bought $1.21 in the currency markets as the dollar rose after today’s strong employment report.
“On Friday, markets are feeling optimistic, pushing the FTSE 100 to an all-time high as US job growth picks up and investors shake off recession concerns,” said Susannah Streeter, senior investment and market analyst at Hargreaves. Lansdown.
“The huge number of nonfarm payrolls in the US, which exceeded estimates, gave the Footsie another boost.
The FTSE 100 has clearly regained its mojo after a rough period in which investors seemed to have fallen out of love with UK assets.
Streeter said: “The composition of the index, heavily weighted towards globally focused commodities, utilities, financials and consumer giants, is proving particularly attractive. Confidence has been restored as investors look to China’s reopening, which has helped commodity stocks expect demand to pick up.”
But Streeter cautioned that the upbeat mood could be short-lived as concerns about consumer resilience could emerge on both sides of the Atlantic in the coming months.
Richard Hunter, head of markets at Interactive Investor, said the all-time high was brief but significant.
“It comes at a time when the UK economy is far from in good shape. High inflation, rising interest rates, falling real wages and a crisis in the cost of living are real headwinds for many. At the same time, the country has been held hostage by a number of strikes that have inevitably affected productivity.’
But he noted: ‘The index is not an accurate barometer of the UK economy. It is estimated that 75 per cent of company income comes from abroad, which, combined with the more recent pound sterling weakness, means that this income becomes more valuable when repatriated.”
Another reason for the more recent appeal of the FTSE 100 is the relatively high level of dividends. The index’s average return is currently 3.5 percent, closer to longer-term levels after the ravages of the pandemic have subsided.”
Alex Wright, portfolio manager of the Fidelity Special Situations and Fidelity Special Values funds, said the FTSE record was the result of very strong performance in 2022 against other global indices
The FTSE 100 returned 10 percent including dividends versus a 5 percent drop for the S&P 500 and a 20 percent drop for the Nasdaq in pounds terms, he said.
However, the key figures don’t paint the full picture and for value investors like myself there are still plenty of investment opportunities in the UK as new records are set.