FTSE 100 hits all-time record close of 7,901.8

The FTSE 100 hit an all-time trading high of 7,906.58 today, before slipping back to close at a record 7,901.8.

The UK’s leading blue chip index has been threatening to break its record previous daytime record of 7,903.50 set in 2018 for several weeks.

It also finished above its previous closing high of 7,877.45, after forecast-beating US jobs figures boosted hopes that the world’s biggest economy will avoid recession and combined with investor hopes that rate rises are about to stall.

The FTSE 100 finished up 1 per cent or 81.64 points, though the domestically focused ended down 21.23 points at 20593.46.

On Wall Street the Dow Jones was up 32.62 at 34,086.56 as London markets closed. Germany’s DAX was off 32.76 points at 5,476.43 but France’s CAC 40 jumped 67.67 points to 7,233.94.

A pound bought $1.21 on currency markets, as the dollar rallied after today’s strong employment report.

‘A Friday feeling of optimism has surged through markets, pushing the FTSE 100 to a record high after US jobs growth powered ahead, and investors shrugged off recession worries,’ said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

‘The bumper US non-farm payrolls number, coming in well above estimates, gave the Footsie another spring in its step.

The FTSE 100 has clearly got its mojo back after a difficult period when investors appeared to have fallen out of love with UK assets.

Streeter said: ‘The make-up of the index, heavily weighted towards globally-focused commodities, utilities, financials and consumer giants is proving particularly attractive. Confidence has rebounded as investors eye up China’s reopening, which has helped commodity stocks amid expectations that demand will surge.’

But Streeter warned the lift in spirits may be short-lived, as worries could erupt about consumer resilience in the months to come on both sides of the Atlantic.

Richard Hunter, head of markets at Interactive Investor, said the all-time high was brief but significant.

‘It comes at a time when the UK economy is far from being in good shape. High inflation, rising interest rates, falling real wages and a cost-of-living crisis for many are real headwinds. At the same time, the country is hostage to any number of strike actions which have inevitably impacted productivity.’

But he noted: ‘The index is not an accurate barometer of the UK economy. An estimated 75 per cent of company earnings come from overseas which, coupled with the more recent weakness in sterling, means that these earnings become more valuable on repatriation.’

‘Another reason for the more recent appeal of the FTSE 100 is the relatively high level of dividends. The average yield of the index is currently 3.5 per cent, nearer to its longer-term level after the ravages of the pandemic dissipate.’

Alex Wright, portfolio manager of the Fidelity Special Situations and Fidelity Special Values funds, said the FTSE record came on the back of a very strong 2022 performance relative to other global indices

The FTSE 100 returned 10 per cent including dividends versus a 5 per cent fall for the S&P 500 and a 20 per cent drop for the Nasdaq in pounds, he said.

‘The headline figures, however, do not present the full picture and for value investors like myself, there are still plenty of investment opportunities in the UK as new records are set.