London’s FTSE 100 index ends week at record high

London’s FTSE 100 share index ended the week at a record high.

The index closed at 8,505.22 points, surpassing its previous closing record of 8,445.80 in May.

Analysts said the international exposure of some of the companies in the FTSE 100 protected the index from some of the turmoil that has weakened sterling, UK government debt securities and the shares of more UK-oriented firms.

REACTION:

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

“The blue-chip index is stuffed with global giants, like miners, which benefit from cheaper sterling, and were among the biggest gainers of the morning.

“The pound fell to $1.21 after a disappointing snapshot of retail sales showing a contraction for the so-called ‘golden quarter’, adding to the picture of stagnation for the UK economy. But it’s provided a tailwind to multinationals and hopes of interest rate cuts from the Bank of England have buoyed investor sentiment.

“FTSE 100 stars like Rolls Royce and Nat West, which saw their share prices double over the year, are among the climbers today. The FTSE 100 has been a laggard compared to US indices.

“They surged higher in 2024, with the S&P 500 gaining more than 23%, helped by big gains among the mighty tech stocks, fuelled by AI optimism.

“But appetite for UK market is being revived, as investors are attracted by its defensive characteristics in an era of global uncertainty. Sectors like healthcare, utilities, consumer staples and telecoms companies can offer stable returns.

“The impressive dividend-paying potential is a key attraction to the UK stock market. There are plenty of mature companies boasting strong dividend cover and the potential for income to grow over the long term.

“Other sectors like energy are also benefitting from economic trends, with Brent Crude rising in early trade, heading for a fourth weekly gain in a row. After years of trying, and failing, to play catch up, the FTSE 100 appears to have finally caught the ball of investor enthusiasm.

“Although fresh volatility is expected on global markets after President Trump returns to the White House, there may be more appetite to shelter in the resilience of the UK market, and benefit from stocks which have seen depressed valuations in recent years.’’