London stock market hits record high / Photo: © AFP/File
London stock market hits record high
London's FTSE 100 stocks index hit record highs Tuesday, catching up with major global peers which have struck all-time peaks this year as inflation cools.
The FTSE reached 8,076.52 points shortly after the open, surpassing a record 8,047.06 struck in February last year.
The London index has in recent weeks been lifted by weakening of the pound, particularly against the dollar, as markets anticipate cuts to UK interest rates in the coming months thanks to slowing price rises.
Conversely, stubbornly-high inflation in the United States has reduced expectations of multiple cuts to borrowing costs from the Federal Reserve this year.
Globally, sentiment is boosted by easing concerns over the Middle East situation and thanks to some strong company earnings.
A weaker pound has benefited British multinationals as they get more from the dollars they earn abroad.
"Around 70 percent of FTSE 100 earnings come from overseas, making them more profitable when translated back to sterling," noted Richard Hunter, head of stocks at Interactive Investor.
"The strength among retailers has provided another spring in the step to investors."
The FTSE eased back after achieving a new pinnacle Tuesday, trading at 8,060.28 points, up 0.5 percent compared with Monday's record close of 8,023.87 points.
- Records worldwide -
The prospect of cuts to global interest rates owing to slowing price rises, coupled with robust company earnings, had already sent the Frankfurt, Paris, Tokyo and Wall Street markets to record highs this year.
"Although there are some conflicting messages in the market, the overall sentiment has improved," said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.
"In the US, the main indices have picked up, and the UK has followed suit. The mood can of course change at short notice, especially when so much hinges on a continuation of the calmer environment in the Middle East -- which is by no means guaranteed.
"Secondary to that, it will be corporate outlook statements over the next couple of days that have the ability to move the dial in this uncertain period," Lund-Yates added.
The FTSE 100, comprising the likes of banking group HSBC, energy giant Shell and consumer goods multinational Unilever, has taken longer to reach a new summit amid UK economic concerns as the country heads into a general election this year.
Official data Tuesday revealed that state borrowing during the UK fiscal year through to early April had overshot forecasts.
That dealt a fresh blow to the Conservative government, widely expected to lose power to the main opposition Labour party according to polls.
P.Avalos--ESF
