The FTSE 100, London’s colossal index, finished Saturday above 7790, rising by 0.7% for one of their best closing days in history. In addition, the FTSE 250 also saw a 0.6% upturn rising by 111 points to 19947.67.
When stock market indices like the FTSE 100 or FTSE 250 rise, the overall value of the companies included in the index increases. This rise can be due to positive economic indicators, strong corporate earnings, and investor optimism.
In 2018, the FTSE had two consecutive days where the index closed above 7800. The index hit an all-high of 7878, having edged the 7900 mark earlier in the season. This data shows that Friday’s close is a positive sign for the overall health of the London stock market and can be a good indication for investors looking to invest in the companies included in the index.
Investors and analysts have high hopes that the index could bypass the “7900” milestone in the coming days as the global economy looks better than analysts predicted. According to Sophie Lund-Yates, 2023 has started well, and the bullish attitude could improve in the coming days.
The FTSE has seen an overall 5% rise in the year after a consecutive upward trend for eight days straight. In addition, the Footsie index has seen a significant rise since the height of COVID-19 in 2020, rising over 55% from pandemic levels.
According to the office of National Statistics in the UK, the UK economy has seen a 0.1% uptick since November. Analysts are confident that this is a sign that Britain is not in recession and that the economy may recover soon.
In addition, a heavy boost from the retail sector, with firms like JD Sports, Tesco, and Marks & Spencer posting massive gains over the festive season. JD Sports and Marks & Spencer saw significant gains posting 26% and 19% in value, followed by Aldi and Lidl, rising by 10% total.
Positivity from the US Economy
Official numbers from the US statistics bureau show that the country’s inflation is at its lowest since 2022. This data may propel the FED to rethink interest rates and end the alarming rate hikes.
In addition, the start of earnings season yesterday suggests that these major banks forecast a slowdown in economic growth but not a severe recession. This development is a positive sign for investors as it suggests that the companies will still be able to perform well, even in a less favorable economic environment.
It is important to note that the earning season is a process that continues to happen every quarter, and it’s always good for investors to keep an eye on the performance of the companies.