London stock market strikes record as sentiment lifts globally
LONDON: London’s FTSE 100 stocks index hit record highs Tuesday, catching up with major global peers that have struck all-time peaks this year as inflation cools. Sentiment was upbeat across major world indices thanks to easing Middle East worries and hopes of interest-rate cuts, while traders are keenly awaiting the release this week of more major earnings and key US inflation data. European stocks rose “for a second day, following the trend registered in Asia overnight, amid growing risk appetite ahead of tech earnings this week”, noted Pierre Veyret, analyst at ActivTrades.
London’s FTSE 100 reached 8,076.52 points shortly after the open, surpassing a record 8,047.06 struck in February last year. The index has in recent weeks been lifted by weakening of the pound, particularly against the dollar, as markets anticipate cuts to UK interest rates in the coming months thanks to slowing price rises. Sterling fell against the US unit and euro Tuesday, benefitting FTSE-listed British multinationals that make big earnings in foreign currencies. The Paris and Frankfurt stock markets won a lift from news of an improvement to business activity in the euro-zone this month.
The apparent easing of Iran-Zionist tensions after the rivals launched missile attacks against each other continued to weigh on oil prices. Investors are a little more upbeat after last week’s struggles fuelled by dimming hopes for US interest rate cuts and concerns the Middle East crisis could escalate into a regional war. “Crude has unwound the Zionist-Iran risk premium but could slip into a holding pattern,” said Vandana Hari at Vanda Insights. “It’s hard to see a correction from current levels unless there’s a breakthrough on the Gaza front.”
Focus is on the corporate reports from Wall Street titans including Amazon, Apple, Netflix and Tesla, with observers saying that traders are keen to see strong earnings as well as positive outlooks. However, there is a worry that equities could take a hit if the results disappoint, with the surge in markets in recent months partly helped by bets on firms providing bumper returns. Ahead of the Wall Street open, General Motors reported higher profits thanks to continued strength in North America that offset a loss in its China business, enabling the carmaker to lift its forecast.