London’s FTSE 100 stocks index reached record highs on Tuesday, aligning with major global peers that have achieved all-time peaks this year amid cooling inflation.
The FTSE surged to 8,076.52 points shortly after the market opened, surpassing the previous record of 8,047.06 set in February last year.
In recent weeks, the London index has been buoyed by the weakening of the pound, particularly against the dollar, as markets anticipate potential cuts to UK interest rates in the coming months due to slowing inflation.
Conversely, the persistent high inflation in the United States has tempered expectations of multiple cuts to borrowing costs by the Federal Reserve this year.
Globally, sentiment has improved due to easing concerns over the situation in the Middle East and strong company earnings reports.
The depreciation of the pound has been advantageous for British multinational companies as they benefit from higher earnings from abroad when converted back to sterling.
“Approximately 70 percent of FTSE 100 earnings are derived from overseas, making them more profitable when translated back to sterling,” observed Richard Hunter, head of stocks at Interactive Investor.
“The strength in the retail sector has further boosted investor confidence.”
After reaching a new peak on Tuesday, the FTSE slightly retreated, trading at 8,060.28 points, up 0.5 percent compared to Monday’s record closing level of 8,023.87 points.
