Yahoo Finance FTSE 100 closes above 8,000 in record first
The FTSE 100 and European stocks finished higher this Thursday as the UK and French indexes hit record highs.
The FTSE 100 (^FTSE) rose 0.18% to close at 8,012 points, the first time the London blue chip index has finished above the 8,000 mark. The CAC 40 (^FCHI) in Paris at one point rose by 1.2% to 7,387.29 points, beating a lifetime high of 7,384.86 points reached on January 5 last year. It finished at 7,375 points while in Germany, the DAX (^GDAXI) gained 0.21% to 15,538.
Across the pond, US stocks werelower on worries that inflation is remaining hotter than hoped.
The Dow Jones (^DJI) lost 0.58% to 33,932 points. The S&P 500 (^GSPC) tumbled 0.56% to 4,124 points and the tech-heavy NASDAQ (^IXIC) retreated 0.51% to 12,008.
US goods and services producers hiked their prices by more than expected last month, dampening hopes that inflation is easing.
The Producer Price Index for final demand rose by 0.7% in January, the US Bureau of Labor Statistics has reported.
Markets are worried about sticky inflation go up against data showing the economy and jobs market remain more resilient than expected. The worry has been that persistently high inflation will push the Fed to hike rates aggressively.
Back in London, the FTSE 100’s surge to record highs reflects hopes that the world economy may avoid recession amid favourable economic data across the globe. This does not mean, however, that investors are particularly upbeat on the UK economy.
Read more: Barclays profits fall 14% as it launches £500m share buyback
Matthew Ryan, head of market strategy at global financial services firm Ebury, said: “With more than 80% of FTSE 100 revenues earned abroad, we see the move as more of a consequence of growing optimism surrounding the easing in inflation rates and risk of recessions globally, rather than necessarily an improvement in sentiment towards the domestic economy.
“The harsh reality is that with UK inflation still stubbornly high, a recession remains very much on the cards, and that does not present a particularly encouraging environment for British stocks. Indeed, the FTSE 250 index, which has a greater weighting towards British firms, is still trading around 17% off its 2021 highs.
“The recent drop in the value of sterling, which has fallen by more than 2% on the dollar so far this month, can also partly explain the boom, as this boosts the value of earnings from overseas.”
Centrica (CNA.L) led the gains after the British Gas owner reported record profits of £3.3bn boosted by soaring wholesale gas prices after Russia’s invasion of Ukraine and as UK households still struggle with the cost of living.
Shares in Centrica jumped by 5.72% as investors are cheering its new £300m share buyback plan announced, on top of the tripling of its profits last year.
Standard Chartered (STAN.L) was also higher after it revealed its statutory pre-tax profits jumped by 28% to $4.3bn (£3.6bn) in 2022 and said the reopening of China after the pandemic is giving grounds for optimism this year.
Shares in the Asia-focused bank were up 4.11% as it announced a new $1bn (£830m) share buyback programme and a final dividend payout worth $405m (£336m).
“Bull markets are born on pessimism, grow on scepticism, mature on optimism and die on euphoria," argued fund management legend Sir John Templeton, and there may be no better example of that right now that the FTSE 100 and the UK equity market,” said AJ Bell investment director Russ Mould.
Read more: FTSE 100: Glencore announces £5.8bn payout to shareholders after record profit
“The dominant theme now seems to be that ‘better times are coming,’ especially after the share price crushings handed out to a lot of cyclicals and consumer discretionary names in the first half of 2022 may have left them looking cheap, while the index’s exposure to miners and oils may also give the FTSE 100 appeal as a potential inflation hedge for good measure.
“The UK’s benchmark index is trading at a new all-time high as it prepares to celebrate its fortieth birthday in January 2024."
Meanwhile, Brent crude (BZ=F) pushed higher and was trading at around $85/barrel on upbeat demand forecasts from both OPEC and the IEA.
In Asia, Tokyo’s Nikkei 225 (^N225) closed higher, climbing 0.71% to 27,696 points, while the Hang Seng (^HSI) in Hong Kong gained 0.76% to 20,971. The Shanghai Composite (000001.SS) slipped 0.96% to 3,249 points.
Watch: Inflation: Fed ‘has a little more work to do,’ strategist says
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