Recovery hopes send Footsie to year high

The FTSE 100 index hit its highest point for more than a year as investors look forward to shops and beer gardens re-opening next week.

The blue-chip benchmark finished 0.8pc up, or 56.90 points, at 6942.22, a level last seen in February last year before the first national lockdown. The FTSE 250 hit alltime highs, gaining 0.4pc, or 86.97 points, to close at 22,247.54.

The successful rollout of Covid vaccines and plans to re-open large swathes of the economy on Monday hve boosted recovery hopes. So successful has the vaccine been that earlier this week the International Monetary Fund upgraded economic forecasts for this year and next, with the UK set to out-pace even the United States over the next two years.

Fund managers said that UK stocks were back in fashion after being unloved because of uncertainties over Brexit and the coronavirus pandemic. They added that international investors are looking for income stocks that pay dividends, something that the UK has in abundance, and not fastgrowing tech stocks listed in the US.

Gervais Williams, money manager at investment group Miton, said: ‘With stocks that have surplus cash, investors get a dividend, they have money to invest and they won’t go bust if interest rates rise.’

Nevertheless the FTSE 100 remains some way behind its all-time high, reached on 22 May 2018 when it finished at 7,877.45.

The pandemic had caused the FTSE 100 to plummet by more than 30pc in February and March last year as panic swept global markets. But since November, when vaccines were shown to work, sentiment has picked up and investors are now gearing up for life after lockdown with consumer focused stocks bounding higher.

Drinks giant Diageo – which owns Guinness and Johnnie Walker – was up 3.1pc, or 96.5p, to 3187p yesterday, Lucky Strike manufacturer British American Tobacco, which also owns the Camel cigarette brand, gained 3pc, or 83.5p, to 2858.5p and Reckitt, which owns Durex, Dettol and Gaviscon, climbed 2.7pc, or 175p, to 6641p ahead of lockdown release next week.

Analysts believe the FTSE 100 and FTSE 250 still have further to climb and fresh data showed the UK construction industry expanded at its fastest pace in six and a half years last month.

The construction purchasing managers’ index (PMI) rose to 61.7 in March, up sharply from 53.3 in February, according to data provider IHS Markit. Any score above the 50 mark indicates growth.