FTSE 100 closes in on record as UK GDP expands

The FTSE 100 was closing in on a record closing high on Friday as the index smashed through 8,000 and continued past the record closing price in early trade.

The index did ease off as the session progressed and fell back below record levels.

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“With the FTSE 100 breaking past the 8,000 level – and at 8,039 points at the time of writing – the blue-chip index is honing-in on a record high if it can hang on to those gains by the end of the day,” said Jason Hollands, Managing Director of Bestinvest

“Some positive headlines for the UK equity market will certainly be welcome news given it has been somewhat unloved in recent times and endured a raft of negative stories about investor outflows and companies switching their listings overseas.”

The FTSE 100 rose on Friday as traders digested the news that the UK economy grew 0.1% in February and looked set to exit recession. As FTSE 100 companies largely earn there revenues overseas, the move was a matter of improved sentiment rather than a more upbeat outlook for earnings.

“Gross domestic product rose 0.1% between January and February, which was in-line with expectations and thanks to growth in manufacturing, especially in utilities. These figures mean the UK economy is likely to have expanded in the first quarter overall, marking an end to recession,” said Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown.

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“With that said, the levels of growth being displayed aren’t very inspiring, particularly for our large services industry. Falls in construction activity also indicate a broader malaise the UK is yet to shake off.”

Mining companies were among the top gainers as the inflation trade continued to support commodity stocks.

Oil majors Shell and BP enjoyed higher oil prices with BP among the best performers.

However, higher oil prices does no favours for airline profitability and easyJet and IAG sank as a result. EasyJet was down around 5% at the time of writing.

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