Plunging pound helps push FTSE to record close

The FTSE 100 has closed at a record high as stocks soared amid signs that interest rate hikes were finally slowing around the world.

The index ended the day at 7,901.8 points, a rise of 1% or 81.64 points.

It finally met the promise of mid-January when the index looked like it might reach an all-time high, but failed to quite reach that point.

A little under an hour before markets were set to close in London, it finally breached the all-time intraday high of 7,903.5 – which it set on May 22, 2018.

The index briefly touched as high as 7,906.58, before falling back a little. But it managed to also close higher than ever before, breaching the 7,877.45 record which was also set on the same day in 2018.

“Despite last year’s equity market volatility and a slowing global economy, the FTSE 100 is defying the doom and gloom, hitting an all-time high, surpassing its peak from before the pandemic in May 2018,” said Victoria Scholar, head of investment at Interactive Investor.

“The UK large-cap index has sharply outperformed the mid-cap FTSE 250 index over the last year which has been much more closely correlated to the UK’s economic and political uncertainty.

“The FTSE 100 is an outward looking index which has enjoyed gains thanks to certain sectors which have benefitted from rising energy prices and interest rates.”

The FTSE’s rise was likely also helped by the pound’s weakness against the dollar. The pound and the FTSE often move in opposite directions to each other.

A short while after markets closed, the pound was down 1.3% against its US equivalent, and could buy just under 1.21 dollars. It also fell 0.5% to 1.11 euros

By the end of the day, the markets in Europe were mixed. The Dax in Germany had dropped 0.2% while France’s Cac 40 had risen 0.9%.

In New York, the S&P 500 was trading down 0.1% and the Dow Jones was up 0.2% a short while after markets closed in Europe.

In company news, BT’s Openreach was given some good news when telecoms regulator Ofcom gave a provisional thumbs up to its plans to discount rates on its fibre broadband products.

The move does not look like it will harm competition, the regulator said. Rivals had argued that Openreach was using its position as the biggest player on the market to price out smaller competitors.

Shares in BT had traded up strongly throughout the day, but gave back some ground in the last minutes of trading and had only gained 0.2% at close.

Shares in NatWest closed down 1.5%. The bank’s chief executive on Friday U-turned on her previous decision not to appear in front of MPs on the Treasury Select Committee next week.

The biggest risers on the FTSE 100 were Haleon, up 11.05p to 329.5p, B&M, up 16.4p to 493.5p, Smith & Nephew, up 38.5p to 1,188p, Shell, up 76.5p to 2,414p, and AstraZeneca, up 328p to 10,578p.

The biggest fallers on the FTSE 100 were Vodafone, down 3.7p to 91.14p, Segro, down 35.2p to 885p, Centrica, down 3p to 95.26p, Persimmon, down 44p to 1,487.5p, and Barratt Developments, down 11p to 472.7p.