FTSE 100 close: London index nears 8,000 point mark for first time despite UK economy toying with recession
London’s FTSE 100 nearly hit the 8,000 point mark for the first time ever yesterday despite the UK economy toying with a recession.
The capital’s premier index climbed for most of the day, before running of steam during the afternoon trading session, dragged down by a hotter than expected US inflation report showing prices rose 6.4 per cent over the last year.
It eventually closed up 0.08 per cent at 7,953.86 points, while its mid-cap domestically-focused counterpart, the FTSE 250, which is more sensitive to shifts in the UK economy, dropped 0.53 per cent to 20,018.23 points.
A greater gearing toward industrial stocks, which have benefited from a sharp rise in energy prices last year and an expected burst in commodity demand from China’s economic reopening, on the FTSE 100 has propelled to new highs.
The index also finished at its highest level ever last night, kicking off the new trading week in positive style.
Analysts cautioned against frothy market optimism.
FTSE 100 has surged this year
“As we all know, the UK’s market mood can change on a dime, and although the economy’s holding up well for now, there are still question marks hanging over corporate margins and consumer spending power, which the forward-looking FTSE may not have correctly priced in,” Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said.
Figures out this morning from the Office for National Statistics revealed household spending power slid 4.3 per cent, despite regular pay growing at the fastest rate since records began over two decades ago at just under seven per cent.
Driving the FTSE 100 higher today were tech stocks.
Telecoms giant BT jumped to the top of the index, advancing nearly four per cent, while rival Vodafone added a shade over 3.5 per cent after news emerged yesterday that Liberty Global has amassed a stake in the firm.
The pound strengthened 0.1 per cent against the US dollar.