FTSE 100 closes in on fresh record highs

The FTSE 100 was closing in on record highs on Friday after another upbeat session took the index within 1% of all-time record highs.

It’s the FTSE 100’s time to shine. After weeks of wallowing in mediocracy as US, German and Japanese equity indices broke to fresh record highs, London’s leading index is now within touching distance of setting new records.

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The record high of 8,012 was set over a year ago, in February 2023, and the index has traded as low as 7,257 since then.

“After a stunning session on Thursday, the FTSE 100 continued its ascent at the end of the trading week with a 0.6% rise to 7,930. Little by little it is edging back towards the 8,000 mark which was hit in February 2023,” said Russ Mould, investment director at AJ Bell.

The Bank of England Governor’s suggestions that interest rates would soon be cut ignited a bumper rally in UK stocks yesterday, spilling over into a second session.

The FTSE 100 was up 0.5% at 7,929 at the time of writing after hitting highs of 7,960 earlier in the session.

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“Upbeat statements in the UK and US helped heave the FTSE 100 up to the next level in Thursday’s trading, with the index closing at six-month highs. Positive momentum has continued with further gains squeezed out at the open,” said Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown.

“The overall mood remains better than at the start of the week, as Andrew Bailey suggested markets are right to expect more than one interest rate cut this year. His comments included a positive update on the latest inflationary markers, which showed things are remaining less sticky than feared.”

The gains were broad on Friday, with most industry sectors gaining on the day. Cyclical stocks were in favour, and strength was evident in banks and housebuilders. Miners missed out on the rally and were among the few stocks trading in the red.

Phoenix Group was the FTSE 100’s top gainer, surging over 8% after revamping its dividend policy as cash generation rose to over £2bn in 2023.

“Life insurer Phoenix is incredibly popular with retirees thanks to its generous dividends, and shareholders will be celebrating a near-8% rise in the share price after better-than-expected results and a positive outlook for cash generation and debt reduction,” Russ Mould said.

JD Sports was the biggest faller after UK retail sales declined in February. Next and Frasers Group also suffered.

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