At the time of writing, The FTSE 100 was trading at 7,742, the highest level since July 2018 as economic sentiment showed signs of improving and strong corporate results helped lift the index.
After a gloomy end to 2022, investors were becoming more optimistic on the outlook for the year ahead. A Chinese reopening is being seen as a tailwind for the global economy and the US is enjoying lower inflation rates.
“Ahead of US inflation numbers on Thursday, markets were relatively upbeat with a good showing on Wall Street last night which spilled over into a positive sentiment among investors in European stocks,” said AJ Bell investment director Russ Mould.
“It helped that a speech by Federal Reserve chair Jerome Powell yesterday didn’t contain any shocks which would cause investors to worry about markets even more.”
A day after Goldman Sachs said they no longer saw a recession in the Europe in 2023, European indices surged with the DAX gaining 1.11% and French CAC 1%.
UK retail
The FTSE 100 was also helped higher by strong results from UK retailers. JD Sports said of their stores had a record Christmas trading period and revenue in the 22 weeks to the end of December increased by 10%.
JD Sports update followed similarly strong results from Next last week and helped Fraser Group shares higher. JD Sports were the FTSE 100’s top riser gaining 6% while Fraser Group jumped 3%.
Although Sainsbury’s shares were negative on the day, the supermarket said they had a record festive trading period as like-for-like sales rose 5.9%.
Barratt Developments shares slipped after the housebuilder said forward sales were down around 29%, despite a strong finish to 2022.
Admiral was the FTSE 100’s top faller, down 8%, after FTSE 250 peer Direct Line shares were smashed 27% lower on higher than expected claims for bad weather.