Susannah Streeter, head of money and markets, Hargreaves Lansdown
“The FTSE has been lifted higher by the fresh breeze in the sails of the UK economy. It’s still on a very slow course of growth but, with slender green shoots appearing, it’s benefiting stocks reliant on the financial health of consumers and companies. With growth not shooting the lights out, and inflationary pressures easing, there is still plenty of optimism around about the prospect of interest rate cuts coming in the summer, which has given the FTSE 100 an extra surge of power.
Gold’s safe-haven credentials glimmered even brighter amid concerns about an escalation of conflict in the Middle East, while Brent Crude jumped by more than 2% to hover around $92 a barrel. Investors appeared rattled in early afternoon trade over warnings about an imminent attack by Iran on Israel, but the index gained back ground to edge to a record high at the close.
The FTSE 100 has clearly regained its mojo as the defensive nature of the index comes to the fore. A large handful of FTSE 100 listed companies, which breached record levels earlier in the month, have been climbing back close to those highs, including Rolls Royce and BAE Systems. Aerospace stocks have been pushed higher by heightened geo-political tensions and post-pandemic demand. With violence having widened in the Middle East, and Ukraine appealing for more weapons to repel Russia, there is an expectation that military budgets will keep expanding. This has been reinforced by defence chiefs in Nordic countries, and the UK, calling for better military preparedness over the next decade.”
