FTSE 100 hits new all-time high

The blue-chip shares index of the UK has hit a new all-time high, just days after a previous record was set last Friday.

At the open on Wednesday morning, the FTSE 100 index increased by almost 1% to hit 7926.35, surpassing the previous high of 7,906. It had taken more than four years to surpass the previous high set in May 2018 before that date.

The index went higher amid growing hopes that the UK could avoid a recession, with the National Institute of Economic and Social Research forecasting Britain would be able to avoid two quarters of contraction this year.

In the first weeks of 2023 global markets have rallied on hopes that inflation may be easing after the shock caused by soaring energy prices.

The FTSE started to rally at the beginning of the year, as investors welcomed China's decision to relax Covid 19 restrictions, which could support global growth. The slide in US inflation has encouraged investors, as well as strong job figures.

Victoria Scholar, head of investment at Interactive Investor, said the UK large-cap index has regained its bullish momentum.

Pearson is the best performing stock on the FTSE 100 over a one-year period, followed by BAE Systems and Antofagasta. JD Sports is the top performer over the past one month, with IAG and 3 i in second and third place. The index, called the Footsie, contains the 100 most valuable companies listed in London. It was created in 1984 when it started at 1,000 points.

The FTSE 100 has a strong international focus, containing mining giants such as Rio Tinto and BHP, and oil majors BP and Shell. It also includes utilities such as power and water suppliers, the supermarkets Sainsbury's and Tesco, banks including Barclays, Lloyds, HSBC and NatWest, the pharmaceuticals firms AstraZeneca and GSK, and the industrial groups Rolls-Royce and BAE Systems.

The FTSE 100 was criticised as a Jurassic Park index for its lack of cutting-edge technology companies, although that helped it avoid losses last year when tech valuations slumped.

During 2022, it rose almost 1%, despite the market slump last year, as worries over inflation and rising interest rates hit equities.

The FTSE has suffered some hefty losses over its lifetime. On Black Monday, it fell more than 10% in October 1987, losing another 12.2% the next day, its worst fall ever.