Zhitong Finance learned that the UK FTSE 100 Index closed at a record high for the first time since February 2023. Recent stock market fluctuations and geopolitical risks have prompted investors to pour into defensive sectors characterized by the UK's benchmark stock index — including energy stocks. The UK FTSE 100 Index closed up 1.6% to 8023.87 points on Monday, breaking through the closing peak of 8014.31 points set in February 2023. It is still below the intraday high of 8047.06; the index has risen about 4% so far this year, with Shell (SHEL.US) and British Petroleum (BP.US) alone contributing nearly half of the increase.
Joshua Mahony, chief market analyst at Scope Markets, said: “Although the US market is currently under pressure due to high valuations in the technology sector driven by expected earnings from artificial intelligence, the FTSE 100 Index has been quietly gaining traction due to its heavy weight in the mining and energy sectors, which will benefit from the recent strengthening of oil, copper and precious metals.”
In addition to energy stocks, the index is also composed of leading global companies such as Rolls-Royce Holdings (Rolls-RoyceHoldings), HSBC Holdings (HSBC.US), AstraZeneca (AZN.US), and Unilever (UL.US). It is catching up with global peers such as the S&P 500 index, which hit a record high earlier this year. The FTSE 100 Index has also benefited from the recent fall in the pound, as expectations for UK interest rate cuts are getting higher.
Axel Rudolph, senior market analyst at IG, said, “The depreciation of the British pound has made it cheaper for international investors to buy British stocks. Coupled with the easing of the situation in the Middle East, it has pushed the FTSE 100 index to a record high.”
European stock markets retreated last week due to concerns that US interest rates will continue to rise and geopolitical tensions in the Middle East. Currently, investors' overall risk appetite is also picking up. The pan-European Stoxx 600 index rose 0.6% on Monday, with telecommunications and personal care stocks leading the way.
At the same time, investors are preparing for the peak of the earnings season, while closely monitoring the statements of major central banks to determine interest rate prospects. ECB Governing Council member Francois Villeroy de Galhau said that uncertainty in the oil market will not prevent interest rate cuts for the first time in June.
“This is a week to evaluate fundamentals,” said Kathleen Brooks, head of research at XTB. Earnings reports need to be flawless to boost risk appetite, and any weakness could be penalized by the market.”