The FTSE 100 neared all-time highs on Friday as London’s leading index once again demonstrated its prowess as a safe-have equity index—if such an equity index exists.
London’s weighting towards commodities and defensive sectors has enabled the FTSE 100 to grind higher this week during the furore surrounding Nvidia’s earnings. It is now less than 1% from all-time highs.
“The FTSE 100 creeps ever closer to its all-time high, after opening 0.3% higher in early trading,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“It’s a stark reminder that panicking doesn’t do investors any favours, after the global sell-off earlier in the month has largely been brushed aside. Expect to see some drifting on the margin, but there won’t be too many catalysts to move markets today, meaning there’s every chance this could be the third week of gains in a row for the UK’s largest index.”
China-focused stocks helped support the index on Friday, with miners and Asia-focused financials ticking nicely higher.
“This followed reports of reform in the Chinese mortgage market, which helped lift shares in the world’s second largest economy,” said AJ Bell investment director, Russ Mould.
However, it was the UK property sector doing the heavy lifting as we headed into the weekend, with LondonMetric, Vistry, and Land Securities doing the heavy lifting. The latest Nationwide House Price Index showed average house prices have increased 2.4% over the past year, and the Bank of England announced mortgage approvals are at the highest level since 2022.
“In the UK, house prices rose at their fastest pace since the end of 2022 on a year-on-year basis but were down month-on-month to hint at the continuing pressures on purchasers from higher mortgage costs, Mould explained.
“The property market could get a renewed boost if the Bank of England opts to follow up its August interest rate cut with another reduction next month. Core PCE inflation data, the Federal Reserve’s preferred measure of prices, could offer some clues around the likely trajectory of rates across the Atlantic when it is released later today.”