It’s up, up and away for the FTSE 100 as London’s flagship index rocketed to another fresh all-time record high on Friday.
After smashing through the 8,600 level like it wasn’t there yesterday, the FTSE 100 firmly had 8,700 in its sights on Friday after gaining another 0.5% in early trade.
The combination of hopes around interest rates and positive corporate developments has helped the index higher this week. Investors will also be encouraged that the index still presents value compared to peers in the US.
“Despite the FTSE 100 outperforming its US peers so far this year, UK indices continue to trade at significant valuation discounts, not least due to differing sector exposures,” said Mark Nelson, Senior Equity Analyst at wealth manager Killik & Co.
Indeed, the repricing of interest rate futures in recent days suggests the Bank of England will cut interest rates between 3 -5 times this year, which will serve as a tailwind for risk appetite and should help support the index.
“It’s been a record-breaking week for the Footsie and enthusiasm is still high, with the index up 5% year to date,” explained Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“Given the volatility this week on Wall Street as investors fret about the trajectory of AI spend, and the impact of Trump’s tariff plans, there’s been a flight to safer havens, offering more reliable returns.”
While ‘safer’ stocks such as utility shares were again well bid on Friday, the mining, financials and engineering sectors with more cyclical attributes joined the rally and helped to take the index to record highs.
Smiths Group shot to the top of the FTSE 100 leaderboard after announcing it would sell a number of business units after a period of shareholder pressure.
“‘You say jump and I say how high’ appears to be the response of industrial conglomerate Smiths Group to pressure from activist investor Engine Capital,” Russ Mould, investment director at AJ Bell said.
“Smiths Group says it plans to spin off its Interconnect arm – which makes broadband connection and antenna parts – and Smiths Detection which makes X-Ray machines for airports. In reality, it is unlikely these decisions have been made purely because Engine published a letter a week or so ago. These plans have likely been in the works for some time, although whether they have been brought forward is another matter.”
Smiths Group shares were 11% higher at the time of writing.