FTSE 250 soars to record highs
Recovery lifts UK stocks but blue chips lag behind
Investors have been ploughing money back into British stocks as the optimism around the UK economy mounts.
In a boost for savers with pensions and IsAs, the domestically-focused Ftse 250 soared to a record high as it finally scaled peaks reached before the pandemic struck.
the index, which is a far better barometer of the UK economy than the international Ftse 100, rose as high as 22,182.63 before closing up 0.76pc, or 166.09 points, at 22,160.57.
the previous record close was 22,108 in January last year before it crashed more than 40pc as Covid-19 triggered panic on global markets.
A gradual recovery started last March but sentiment has picked up since november when vaccines were shown to work. Investors are now gearing up for life after lockdown with consumer-focused stocks bounding higher.
on the Ftse 250, cruise company Carnival was up 5.4pc yesterday, Upper Crust owners ssP gained 6.5pc, shopping centre owner Hammerson moved 6.8pc higher and pub group Mitchell & Butlers added 3.7pc.
ssP shares have more than doubled since november on hopes that the reopening of the economy will see customers return to its outlets at train stations and airports.
UK funds have also performed well with investors handing money over to expert managers to take advantage of the upturn. Among the top performers were the Jupiter UK Mid Cap fund, managed by richard Watts, up 112pc since March last year.
Another stand-out performer has been the Baillie Gifford smaller Companies fund, which has gained 108pc over the same time period. It is managed by Charlie Broughton.
Laith Khalaf, analyst at AJ Bell, said: ‘It is certainly going to be a good year for active mid-cap money managers. the vaccines have turned everything around.’
But while the Ftse 250 goes from strength to strength, its older brother, the Ftse 100, has yet to fully recover from the pandemic. the blue-chip closed up 61.77 points at 6885.32, still some way short its pre-pandemic peak of 7675 in January last year and all-time high of close to 7900 in May 2018.
Unlike the Ftse 250, the Ftse 100 is much more internationally focused, and many of the miners, banks and oilers earn their money overseas, where there is still uncertainty over third waves of the pandemic.
Analysts believe that the Ftse 250 still has further to climb and fresh data showed the UK’s services industry returned to growth in March, with business activity, new orders and employment all rebounding from the previous month.
the IHs Markit purchasing managers’ index for services registered 56.3 in March, with any score above the 50 mark indicating growth. It was the first time the index has posted a score above 50 since october.
there is also evidence recruiters are placing more people in work as businesses start returning to normal because of lockdown measures easing.
Permanent job opportunities in recent weeks showed the biggest increase for almost six years, said accountant KPMG, while pay rates increased for the first time in three months.