FTSE 100 hits record closing high amid hopes of interest rates cuts – as it happened (2024)

We must wait until tomorrow morning, at the earliest, to see if the FTSE 100 can storm to a new intraday alltime high (beating its previous record of 8,047 points).

If the pound continues to weaken, and if tensions in the Midde East continue to ease, it’s quite possible.

Until then, here’s today’s main stories:

Bloomberg have calculated that Shell and BP alone accounting for almost half of the 4% rise in the FTSE 100 so far this year.

They add:

AstraZeneca, HSBC Holdings and jet-engine maker Rolls-Royce are also among the main drivers.

George Lagarias, chief economist at Mazars, says the FTSE 100 still has a way to go to catch up to its peers.

“The FTSE 100 hitting it’s all time-highs on Monday is certainly a positive signal for investors who are looking to capitalise on the low valuations of good quality British equities.

To be sure, the index has a long way to climb if it is to catch up to the recent performance of its developed market peers. And more will be required for the LSE to attract foreign listings.”

Britain’s FTSE 250 share index, which contains medium-sized coompanies, had a decent day today too.

The FTSE 250 jumped by 1.07% today, or by 208 points, to 19,599 points, led by Tyman +30%) after the UK door and window handle-maker agreed a takeover offer from a US rival.

The FTSE 250 is seen as a better gauge of the UK economy than the FTSE 100, and it’s notable that it is around 20% off its alltime high, set in 2021.….

Dan Coatsworth, investment analyst at AJ Bell, sums up a historic day on the London stock market:

“While the FTSE 100 failed to hit a new intraday high, it did achieve a new record closing high at 8,023. The strong session, with the UK index up 1.6% on the day, is another reminder that the UK market is not dead in the water.

“The all-time intraday high for the FTSE 100 is 8,047 and today it was just a handful of points away from breaking that level. Driving the market was renewed optimism that Middle East tensions are easing, leading to a buying spree among investors. Sterling weakness also benefited the army of FTSE stocks that earn in US dollars.

“The Bank of England is now expected to start cutting rates before the Federal Reserve sharpens its knife and that’s led to divergent fortunes for the respective currencies.

“Favourite items on the menu to fill portfolios included Marks & Spencer, which was the recipient of a positive broker note from Jefferies telling clients to buy the stock, alongside Next and Sainsbury’s. All three saw their ratings lifted from ‘hold’ to ‘buy’ as part of a review of the broader retail sector.

“The timing of the upgrades was savvy given how attention is shifting to the Bank of England potentially being the trailblazer with rate cuts this summer. That implies consumers could soon be feeling flush if financial pressures ease, and for many there is nothing better than a shopping spree to lift the spirits.

“The key contributors to the FTSE in terms of index points were AstraZeneca, HSBC, Shell and GSK.

“Across the pond, the Nasdaq got off to a wobbly start, quickly losing strength as investors braced themselves for a potentially testing week ahead as the mega-caps start to report quarterly numbers, starting with Tesla tomorrow.”

The weakness of the pound today, as it sagged to a five-month low, was a major factor behind the FTSE 100’s rally to an alltime closing high.

Rachel Winter, partner at Killik & Co, explains:

“The FTSE 100 has just hit a record closing high of 8023. This is largely due to the weakness of sterling versus the dollar.

The FTSE contains a large number of big international companies that earn their revenue in dollars and report their profits in sterling. When the dollar strengthens, these companies become more profitable in sterling terms.

The strength of the dollar is due to sticky inflation in the US, which means that US interest rates will remain higher for longer. Higher US interest rates make dollars more attractive to hold, and so demand for dollars has increased and their price has risen.”

Newsflash: Britain’s blue-chip share index has hit a new alltime closing high.

The FTSE 100 index, which tracks the one hundred largest companies listed in London, has closed at its highest ever level, at 8023.87 points, after jumping by 128 points (+1.62%) today.

That’s above its previous record close of 8,014 points, set in February 2023. But, this still leaves the FTSE 100 slightly below its alltime intraday high of 8,047.06 points, also set in February last year.

Most of the companies on the Footsie rallied today, with retailers among the risers. Marks & Spencer gained 4.4%, Sainsbury rose by 3.9% and Tesco gained 3.4%.

Today’s rally came as geopolitical tensions eased in the financial markets, with investors relieved there were no further clashes between Israel and Iran last weekend.

Hopes of interest rate cuts this year also supported the market, after deputy Bank of England governor Sir Dave Ramsden said last Friday that UK inflation could be lower than expected over the next three years, near the BoE’s target of 2%.

The money markets are now fully pricing a cut to UK interest rates, by August, lowering from from 5.25% to 5%, with two cuts this year expected.

Drum role….. the London stock market has just entered the end-of-day closing auction, so we’ll soon know where the FTSE 100 has ended the day.

Going into the auction, the index was up around 136 points at 8031 points, which would be a record closing high, but not an intraday high.

Just five minutes of trading to go in London… and the FTSE 100’s on track to end at a record closing high….

Let’s not rule out a record high on the FTSE 100 today, though.

The index is having a late run at the record (8,047 points), and is now up 141 points (+1.75%) back at 8037 points.

That would be a record closing high (but not, quite, an intraday high, which is what really counts).

Susannah Streeter, head of money and markets at Hargreaves Lansdown, says:

“London’s blue-chip index has had a surge of power as heightened geopolitical tensions have eased, and investors assessed the brighter prospects for the UK economy, with interest rate cuts spied on the horizon.

It’s tantalisingly close to breaching the all-time intraday high of 8,047 and it’s been trading above its record closing value of 8,014.

Gold, a safe haven asset, has slipped back slightly in the absence of fresh attacks by Iran or Israel. However, the precious metal is still hovering close to record highs. Brent Crude has also fallen back slightly as the focus turns to the prospects of weakening demand in the US if high interest rates linger for longer. However, it’s not had much effect on the share prices of the big energy giants.

Tensions are still simmering in the Middle East and there are ongoing concerns about the potential that they could flare up again, causing fresh disruption to supplies.

The gold price has eased away from its recent record highs today, as geopolitical worries ease.

Spot gold is down 2.4% at $2,338 per ounce, down around $52 per ounce today.

Earlier this month it hit a record high of $2,431 per ounce, as investors nervous about inflation or the Middle East crisis bought into gold as a safe haven.

George Khoury, global head of education and research at CFI, explains:

The gold market experienced a strong decline today, as fears surrounding a wider conflict in the Middle East eased, reducing the need for investors to seek safe-haven assets like gold. However, geopolitical concerns could remain an important driving force for gold.

Furthermore, market participants are now keenly awaiting a crucial U.S. inflation reading - the Personal Consumption Expenditures (PCE) price index - due later this week. This data point is expected to provide important cues on the future trajectory of interest rates, which can significantly impact the attractiveness of non-yielding assets like gold. Ahead of this week’s important economic data releases, including the flash global PMIs and the US Advance Q1 GDP report, traders could remain cautious as stronger-than-expected data could drive gold lower.

Despite the positive start to trading on Wall Street, the FTSE 100 has slipped away from the record high…. it’s now trading around 8027 points.

It’s still a strong day’s trading, with the Footsie up 1.6% or 130 points so far today.

The New York stock market has opened with gains on the main indices.

The Dow Jones industrial average, which tracks 30 large US stocks, is up 167 points at the open at 38,153, +0.44%.

The broader S&P 500 index gained 0.5%, while the tech-focused Nasdaq is 0.7% higher.

But electric car maker Tesla continues to lose ground in the markets. It has dropped by 5% in early trading, after cutting prices late last week in an attempt to drum up sales.

Tesla is due to report its financial results tomorrow, with analysts expecting its worst performance in seven years. Elon Musk has postponed a trip to India, including a planned meeting with the prime minister, Narendra Modi, so he can focus on “very heavy obligations” at the company.

The odds of seeing a new alltime on the London stock market today are narrowing… with the FTSE 100 now touching 8041 points.

Just six points off the record….

The FTSE 100 is inching yet closer to the alltime peak… its now up to 8037 points, +140 today, meaning it’s just 10 points shy of the record.

Nearly every stock on the Footsie is up today.