FTSE 100 continues to break new ground
London’s top flight closed above 7,800 points for the first time ever yesterday as fears of a trade war between the US and China dissipated and the pound continued its downward trajectory.
Markets were buoyed by news overnight that the global superpowers put a hold on punitive import tariffs on each others’ goods.
The FTSE 100 Index closed up 80.38 points, or 1.03 per cent at 7,859.17, adding £20.7 billion to the UK market.
Among the biggest risers were 3i Group, Astrazeneca, Marks & Spencer and Burberry.
The soaring Footsie came at the expense of a fall in the pound, which was trading 0.42 per cent down at $1.341.
Against the euro, sterling was down 0.13 per cent at 1.141 euros.
Evraz, British American Tobacco and MicroFocus were among the few stocks trading in negative territory.
Donald Tosh, senior investment manager, Brewin Dolphin Glasgow, said: “Markets have reached another all-time high today. This isn’t really a surprise, given Mark Carney’s volte-face regarding interest rates, which has precipitated a rapid devaluation of Sterling (versus the US Dollar) since 15th April and a 12 per cent jump in the FTSE since the end of March.
“The rapid rise in the market is also linked to the realisation that global growth is actually just under 4 per cent, and that the US and China are not going to help their own positions without a realistic outcome to the ‘trade-war’ discussions.
“As ever, the worst case scenario was unlikely; yet it was discounted by the market, which has left plenty of headroom for investors.
“Markets don’t go up in straight lines, but the line from 22nd March is as straight as I can remember. A cooling off period would help, but then again, a few deals lurking in the background remind us of the opportunities which lie ahead.
“Indeed, the Ocado-Kroger deal is exactly the sort of story that drives irrational behaviour. So, in the meantime, I feel that the safe option is to seek out high-return businesses and stick with them, as they will see me right in the longer term.”