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The FTSE 100 has surpassed 8,500, surpassing a previous record of 8,474 last May.
The new all-time closing high came on the back of a weaker pound, which was trading at $1.22 against the dollar, and expectations of further interest rate cuts to boost a flat economy.
Bitcoin also rose to $104,882 ahead of the inauguration of Donald Trump, who may build a strategic cryptocurrency reserve in his second term as US president.
Finance, mining and construction stocks were among the biggest risers on the FTSE 100, which ended the day up 1.4 per cent or 113.32 points at 8,505.22. The index also set a new intraday record of 8,533.43 earlier in the session.
The FTSE 100 has risen above 8,500 on expectations of future interest rate cuts by the Bank of England to boost a flat economy.
The nationally-oriented FTSE 250 posted a more modest gain of 0.3 per cent to finish at 20,597.42.
“The FTSE 100 has caught that Friday feeling, sailing upwards on a wave of enthusiasm,” says Susannah Streeter, head of money and markets at Hargreaves Lansdown.
“The blue-chip index is packed with global giants such as miners, which are benefiting from a cheaper pound, and were among the morning’s biggest gainers.”
It says the pound fell after this morning’s disappointing retail sales outlook showed a contraction for the so-called “golden quarter” at the end of last year, adding to the picture of stagnation for the UK economy.
“But it has provided a tailwind to multinationals and hopes of interest rate cuts by the Bank of England have boosted investor confidence.”
Jo Rands, portfolio manager at Martin Currie, part of Franklin Templeton, says the FTSE 100’s record high has come despite negative rhetoric around rising bond yields and the outlook for the UK economy. .
“The large-cap index is traditionally a low-beta, defensive market, predominantly made up of very international companies,” he says.
“The FTSE 100 generates around 80 per cent of its revenue outside the UK, which also means the weaker pound has been a positive influence for the index.”
The FTSE 100’s strong initial performance this year comes after it faltered in late 2024.
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