The FTSE 100 reached a new all-time high, leading the week as Europe’s top-performing market due to a reduction in Middle Eastern tensions.
Today, the UK’s premier stock market rose by 1.71% to end at 8,030.92, surpassing its last record of 8,014 set in February 2023.
The commodity-rich index and the FTSE 250 saw gains up to 1.1% as tin prices soared to a two-and-a-half-year peak and nickel prices hit their highest in seven months.
Outperforming other major European markets, London’s index was ahead, with Frankfurt’s Dax increasing by 0.6% and Paris’ Cac 40 by 0.3% as oil and gold prices fell.
Investors have started to unwind some of the cautious strategies adopted over the weekend due to concerns about a potential broader conflict in the Middle East.
The FTSE 100’s rise was further helped by the pound’s decline, which has fallen over 1% in the past three days to $1.23, a low not seen since November, amid indications that US interest rates might remain elevated longer than expected.
Bank of England Governor Andrew Bailey recently forecasted a significant reduction in inflation next month, despite data indicating a faster-than-anticipated price increase in March.
Kazuo Kamitani from Nomura Securities noted, “It appears that neither Israel nor Iran is seeking to escalate the Middle East crisis… and with no imminent aggressive moves expected from either side, investor anxieties have somewhat diminished.”
Mohit Kumar, chief economist for Europe at Jefferies, commented, “Risk sentiment has improved overnight following a weekend free of negative geopolitical developments.”
