FTSE 100 hits record high again
The London Stock Exchange's FTSE 100 Index, which is based on the stocks of the 100 largest-cap companies, reached a record high of 7,926 points on Wednesday.
That figure beat the previous record, which was set on February 3, when it reached 7,906 points. The capitalisation of major UK companies has thus surpassed not only the level immediately before the pandemic, but has also beaten the record held since 22 May 2018 (7,903 points).
Experts interviewed by The Times believe that market players were encouraged by predictions that a recession in the British economy could not only be milder than expected, but could possibly be avoided altogether.
It is noted that investors will keep a close eye on UK gross domestic product (GDP) data, which will be released on Friday. Preliminary data is expected to show that the British economy contracted by 0.3% in December last year, but probably avoided a technical recession in the fourth quarter.
Meanwhile, the National Institute of Economic and Social Research (NIESR) has lowered its forecast for UK GDP growth this year to 0.2% from 0.7%, saying Britain will avoid recession in 2023, but its population will face the consequences of a severe fall in living standards.
"Now that we seem to be sticking to the idea that recession is even further away, I would feel a little more comfortable with the FTSE 100 and it is still relatively cheap," said the chief market analyst at IG Group.
The FTSE 100 Index began its run since 1984 at 1,000 points. It has been showing strong gains in recent weeks after the Chinese authorities announced the lifting of a number of coronavirus restrictions and inflation slowed in the US.