FTSE 100 closes above 7800 for only the third time in its history as it races towards record high: Milestone could be beaten in coming days
- On another day of gains, blue chip index rose 0.6%, or 50.03 points, to 7844.07
- Footsie has closed above 7800 only twice before – on consecutive days in 2018
- Up more than 5% so far this year, rising on eight of the first nine days of trading
The FTSE 100 closed above 7800 for only the third time in its history last night as it raced towards a record high.
On another day of gains in London, the blue chip index rose 0.6 per cent, or 50.03 points, to 7844.07.
The more domestically-focused FTSE 250, meanwhile, added 0.6 per cent, or 111.71 points, to 19952.84.
The Footsie has closed above 7800 only twice before – on consecutive days in May 2018 when it ended trading at 7877 having nudged above 7900 earlier in the session.
Hopes are growing that this milestone could be beaten in the coming days amid signs the global economy may fare better than feared this year.
‘Investors have started 2023 with a bang,’ said Sophie Lund-Yates, an analyst at Hargreaves Lansdown.
The Footsie has gained more than 5 per cent so far this year, rising on eight of the first nine days of trading in 2023.
It is up 57 per cent since it dipped below the 5000 mark during the depths of the Covid panic in early 2020.
Official figures yesterday showed the UK economy grew 0.1pc in November, easing concerns that Britain is in recession.
The report from the Office for National Statistics followed a bumper set of trading updates in recent days from firms including Marks & Spencer, JD Sports and Next as well as supermarkets Tesco, Sainsbury’s, Aldi and Lidl, all of which reported upbeat sales over Christmas.
JD’s value has risen by a staggering 27 per cent since the start of 2023, Next is up 13 per cent and Marks & Spencer by 18 per cent.
Global economic developments have boosted the likes of British Airways owner International Airlines Group – up by 27 per cent since the start of the year – and aero engine maker Rolls-Royce, which has roared 17 per cent ahead.
Official figures in the US this week showed inflation in the world’s biggest economy falling to its lowest level in more than a year, paving the way for the Federal Reserve to slow and eventually pause its programme of interest rate hikes.
The start of the Wall Street earnings season yesterday meanwhile suggested New York’s banking giants were expecting a mild but not ruinous downturn over coming months.
And the lifting of Covid restrictions in China are likely to boost growth in the world’s second most powerful economic force. Russ Mould, investment director at AJ Bell, said a record high for the Footsie ‘would give overseas investors another reason to start looking more seriously at UK stocks’.
He added: ‘After the Brexit vote, UK stocks were off the menu for many international investors and valuations plummeted. This remained the case for some time until some canny players realised the opportunities to be had.
‘Last year was a big turning point whereby the UK was one of the few major markets around the world not to see a big slump.
‘Now, if the FTSE 100 breaks a record, it’s another trophy in the cabinet for the UK and a reason to shout from the hilltops that the market is not as dull as people think.’
Lund-Yates said: ‘The FTSE 100 is closing in on record highs as the UK’s unexpected GDP growth caused a welcome swell for the market.’