FTSE close: Blue chip index sets a new record high as recession and inflation fears ease
London’s FTSE 100 Index ended the week on a high having reached its highest ever score, beating the previous record of 7,903.5 set in May 2018.
On Friday, the index had briefly pushed as high as 7,906.58 as global inflation and interest rate fears continued to ease.
The index of the UK’s largest publicly-listed firms was trading up more than 1% on Friday, helping it to push past its previous peak.
The index has previously hit an intraday high of 7,903.5 points in May 2018. Its all-time high close was 7,877.45.
The FTSE 100 closed the week just off the all-time high at 7,900.41, 80.5 points up on the previous close.
Global markets have been buoyant in recent weeks due to optimism that central banks will halt recent interest rate increases and a slowdown in inflation across key global economies.
Alex Wright, portfolio manager, Fidelity Special Situations and Fidelity Special Values, said : “The record came on the back of a very strong 2022 performance relative to other global indices, returning 10 per cent including dividends versus a 5 per centfall for the S&P 500 and a 20% drop for the Nasdaq (in pounds).
“The headline figures, however, do not present the full picture and for value investors like myself, there are still plenty of investment opportunities in the UK as new records are set.
The FTSE is a ‘market cap weighted index’, meaning its composition and weighting reflects the market capitalisation of the individual companies. Positive performance of the index has been largely driven by sectors such as energy, mining and banks which have benefited from the macroeconomic backdrop of rising energy prices and higher inflation.
However, if you dig a little deeper, you’ll notice a huge discrepancy in returns, with mid and small cap companies in particular lagging significantly. In fact, 2022 saw only a very small proportion of the FTSE 350 constituents (c. 20 per cent) outperform – the lowest number on record since 1990, according to research by Berenberg.”
Henry Saker-Clark and August Graham, Press Association