FTSE 100 hits 9,000 points for first time

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.The FTSE 100 reached 9,000 factors for the primary time on Tuesday, as UK shares profit from international buyers diversifying away from the US amid uncertainty over President Donald Trump’s commerce conflict.The UK blue-chip inventory index has outperformed the S&P 500 and the Stoxx Europe 600 indices to this point this yr, having climbed 10.3 per cent.UK shares have benefited this yr from larger investor curiosity in non-US belongings, a pattern prompted by concern about Trump’s risky policymaking. “It’s place to cover,” stated Emmanuel Cau, head of European fairness technique at Barclays. The UK reached a partial commerce settlement with the US in early Might, which some analysts say has given the London market a bonus over its European friends. “So long as we now have this tariff overhang, the FTSE 100 must be doing effectively . . . in comparison with indices on the continent being capped by tariff uncertainty and euro energy,” Cau stated. The index touched the brand new report in early buying and selling on Tuesday morning, earlier than later falling again to commerce 0.4 per cent decrease, just under the 9000 mark. Luca Paolini, chief strategist at Pictet Asset Administration, stated: “We just like the UK market: an inexpensive outdated economic system market with the correct mix of defensives and cyclicals”Low valuations of London-listed shares have additionally attracted these on the lookout for completely different locations to take a position this yr.The FTSE 100 trades at a price-to-earnings ratio of about 17 instances, in contrast with 27.3 for the S&P 500, in line with LSEG information. “Persons are freaked out about Europe with the tariffs, so the UK is sort of a ‘protected haven’ from a valuation perspective,” stated Neil Birrell, chief funding officer at UK investor Premier Miton, including that the UK’s commerce settlement “offers a level of consolation to buyers”. Cau stated the FTSE 100 was “largely benefiting from energy in a couple of huge sectors”, together with mining, telecoms, financials and utilities. Defence shares have been a few of London’s prime performers to this point this yr. Shares in BAE Programs have risen about 65 per cent for the reason that begin of the yr, whereas Rolls-Royce has climbed 75 per cent.Monetary corporations have additionally boosted the index after a powerful begin to the yr. Shares in Lloyds Financial institution are up about 41 per cent and Prudential has elevated about 47 per cent. Nonetheless, buyers stated the UK authorities’s tight fiscal place stays a barrier to additional development.“I’ll wrestle with the UK till we’ve acquired some extra certainty on the fiscal place,” stated Birrell. Barclays’ Cau stated “if we see a correct bond market strop” in regards to the UK’s fiscal place, then “there is perhaps a ‘promote UK’ second”. Extra reporting by Ian Smith and Ray Douglas