Goldman Sachs anticipates the FTSE 100 reaching a new peak within the coming year, spurred by declining interest rates.
The firm’s revised projection sets the UK’s premier stock index at 8,200, surpassing its previous high of 8,014.31 achieved in February of the previous year.
This update follows hints from both the Bank of England and the US Federal Reserve about potential interest rate reductions this summer.
Lilia Peytavin, a Goldman Sachs portfolio strategist, noted the likely rise in valuations with the onset of a rate-cutting cycle. She also highlighted the relative undervaluation of European stocks compared to their American counterparts.
After comments from Bank of England’s Andrew Bailey about imminent rate cuts, the FTSE 100 recently experienced a 1.6% rise, closing at 7,930.92, though it has since dipped slightly to 7,896.57.
Government cuts stake in NatWest
The government’s ownership in NatWest Group PLC (LSE: NWG) has dropped below 30% for the first time since the financial institution was bailed out during the global financial crisis.
Following the sale of 101,159,756 shares on Monday, the Treasury’s stake was reduced from 30.98% to 29.82%. This marks a significant decrease from the 37.98% held late last year, effectively ending the Treasury’s status as a controlling shareholder.
A bank spokesperson welcomed the government’s ongoing efforts to reprivatize NatWest Group, noting the positive progress towards this goal, especially with the shareholding now under 30%.
This move aligns with the interests of the bank and its shareholders. There are plans for a public sale of the government’s remaining stake in NatWest later in the year, anticipated to commence by summer at the earliest.
