‘US markets faltered after a blowout session the previous day, while the surprising upstart came in the form of the FTSE 100, which has set the early pace and blew past its previous record high in opening trade’
The UK’s premier stock market index, the FTSE 100, has shattered records, reaching a new all-time high, thanks to a robust rally driven by miners and housebuilders who are riding on increasing expectations for more cuts in interest rates.
Smashing past the previous peak of 8,474.41, set back in May last year, the London benchmark index leapt over 1% as Friday’s trading kicked off, hitting a high of 8,480.57. Market giants from the mining sector such as Antofagasta, Glencore, Anglo American, and the top housebuilders including Persimmon, Taylor Wimpey, and Barratt Redrow were among the frontrunners leading this surge.
Richard Hunter, head of markets at Interactive Investor, said the rally came as a surprise on Friday morning. He said: “US markets faltered after a blowout session the previous day, while the surprising upstart came in the form of the FTSE 100, which has set the early pace and blew past its previous record high in opening trade.
“The housebuilders were also strong, given a combination of potentially lowering interest rates and some recent updates which have shown robust forward order books, with rises of 2% or more for the likes of Persimmon, Taylor Wimpey, Barratt Redrow and Berkeley Group. The FTSE 100 is now ahead by 3.5% this year, and marginally ahead of the previous record level set last May.”
A series of critical economic data points unveiled in recent days has significantly raised the odds of an interest rate cut when the Bank of England makes its next decision in February.
An unexpected drop in the Consumer Prices Index (CPI) inflation rate, from 2.6% in November to 2.5% in December, is likely to reassure policymakers that rates can be further reduced. Additionally, new gross domestic product (GDP) data released on Thursday revealed a modest 0.1% increase in the UK economy for November, falling short of economists’ predictions.
This lower-than-expected data has amplified calls for the Bank to relax monetary policy to stimulate the economy.
