The FTSE 100 smashed through record highs on Thursday as mining stocks powered the index higher.
After weeks of struggling to break through the 8,900, the FTSE 100 sailed through the prior level of resistance on Thursday and traded as high as 8,973 – a fresh intraday record high. This may be broken again as the session progresses, with the index trading very close to highs.
The FTSE 100’s sharp rally is all the more remarkable given the lack of movement in US and some European indices amid the latest outburst of trade threats from the US President.
“The Footsie is footloose, shrugging off trade worries to dance to an all-time high. Even a fresh volley of tariff letters from President Trump has failed to knock investors sentiment,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“The President’s latest moves are seen as posturing, and there is high expectation that there will be plenty of negotiations to head off higher duties in the weeks ahead. Indications that the EU is edging closer to a deal with the US, with an agreement thought to be possible in a few days, has added to the positive vibes. So, hopes are riding high that the effects on global growth won’t be as onerous as feared.”
Streeter continued to explain that Trump’s credibility with the markets is diminishing, with many traders now ignoring anything he says relating to trade.
“The FTSE 100 is stuffed full of multinationals which are sensitive to the outlook for the world economy and with the so-called ‘TACO trade’ in full swing, it’s benefiting from more optimism,” Streeter said.
“Investors expect that Trump will ‘chicken out’ from imposing his threat.”
Miners were the key protagonists in the FTSE 100’s record high. After stumbling the previous day following Trump’s threat of 50% tariffs on copper, the sector rebounded with a vengeance on Thursday.
Anglo American was the FTSE 100’s top riser with a gain of 5.5%. Glencore rose 4.6% and Rio Tinto added 4.5%.
WPP recovered some of yesterday’s losses after the beleaguered advertising giant announced a new CEO – a job very few would want in the current environment.
“Currently in the middle of an existential crisis, advertising agency WPP is still putting out the flames from yesterday’s profit warning as it announces a new chief executive. Cindy Rose clearly likes a challenge given she’s accepted the top job,” explained Dan Coatsworth, investment analyst at AJ Bell.
“Rose’s background at Microsoft and Disney means she is well versed with the fast-moving world of technology and consumer trends, something that is vital to make WPP a success. Clients rely on WPP to come up with the right ways to attract and retain customers, and the agency needs to shine in this regard if it still wants to exist in 10 years’ time.”