The UK’s blue-chip shares index has hit a fresh all-time high, only days after a previous record was set last Friday.
The FTSE 100 index rose by almost 1% on Wednesday morning to hit 7934.30 points, surpassing the former high of 7,906.58 points set on 3 February.
Before that date it had taken more than four years to surpass the previous high set in May 2018.
Global markets have rallied in the first weeks of this year on hopes that inflation may be easing, after the shock prompted by soaring energy prices.
The FTSE began to rally at the start of the year, as investors welcomed China’s decision to relax Covid-19 restrictions, which could support global growth. They have also been heartened by the slide in US inflation, as well as the country’s strong employment figures.
The oil company BP was the biggest riser on Wednesday morning, climbing just over 3% in morning trading, taking the shares to their highest level since August 2019. Its shares continued their rise, a day after the company revealed its profits had doubled to $28bn (£23bn) in 2022, as it benefited from the sharp increase in gas prices linked to the Russia-Ukraine war.
The FTSE 100’s rise came amid growing hopes that the UK could avoid a recession, with the National Institute of Economic and Social Research forecasting Britain was now likely to avoid two quarters of contraction this year.
“The UK large-cap index has restored its bullish momentum,” said Victoria Scholar, the head of investment at Interactive Investor.
“Over a one-year period, Pearson is the best performing stock on the FTSE 100 followed by BAE Systems and Antofagasta. Over the past one month, JD Sports is the top performer, with IAG and 3i in second and third place.”
The Footsie, as the index is informally known, contains the 100 most valuable companies listed in London. It was created in 1984, when it started at 1,000 points.
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The FTSE 100 has a strong international focus, containing mining firms such as Rio Tinto and Anglo American, and the oil majors BP and Shell. It also contains utilities such as power and water suppliers, consumer-focused companies such as Unilever, the supermarkets Sainsbury’s and Tesco, banks including Barclays, Lloyds, HSBC and NatWest, the pharmaceuticals firms AstraZeneca and GSK, and the industrial groups Rolls-Royce and BAE Systems.
The FTSE 100 has been criticised as being a “Jurassic Park” index, for its lack of cutting-edge technology companies – although that helped it avoid losses last year, when big tech valuations slumped.
During 2022 it rose almost 1%, defying the wider market slump during last year as worries over inflation and rising interest rates hit equities.
The FTSE has suffered some hefty losses over its lifetime. On Black Monday, in October 1987, it fell more than 10%, losing another 12.2% the next day – its worst fall ever.
