FTSE 100 hits another record closing high with BoE rate decision in focus
London’s stock market rally continued on Wednesday, as a weakened pound ahead of the Bank of England’s rates decision on Thursday helped push the FTSE 100 to a new record closing price.
The FTSE 100 rose more than 40 points, continuing the spring rally that has pushed the blue-chip index to repeatedly break records in recent weeks.
Airlines IAG and easyJet were among the top risers, helping to lift the index 0.49%, to 8,354.05 points at the close.
The companies have been buoyed by a fall in the price of oil, which supports cheaper fuel prices for airlines.
The price of crude oil has fallen about 10% since the beginning of April, though Brent crude was up 0.7% at markets close, valued at just below 84 US dollars per barrel.
But it was another weakening in sterling that helped the export-heavy FTSE 100 push on, as traders anticipated potential signs from the Bank’s Monetary Policy Committee that it may soon cut interest rates.
The MPC will announce its latest rates decision on Thursday morning.
Most analysts expect the Bank to hold rates, but clues of future cuts will be high on the agenda, say experts.
Russ Mould, investment director at AJ Bell, said: “The FTSE 100 continues to forge to new all-time highs with sterling weakness providing the index with a bit of a kicker.
“A fall in the domestic currency is typically helpful to the FTSE 100 because it boosts the relative value of its dominant overseas earnings.
“Currency traders are betting against the pound ahead of the Bank of England’s latest meeting tomorrow, amid a growing expectation it will cut rates earlier than counterparts at the US Federal Reserve.
“It’s extremely unlikely there will be any action tomorrow but the market will be watching the surrounding commentary for any clues on when the Bank of England might take the plunge on rates.
“Insurer Direct Line is looking to rebuild after a very difficult 2023 which saw it cancel its prized dividend. The company is looking to win back credibility with the market and the insurer’s first-quarter trading update saw it reaffirm cost-cutting targets.
“However, investors remain lukewarm and the longer the shares trade at a depressed valuation the more vulnerable the company looks to takeover attention – having batted off an approach from Ageas earlier this year.”
JD Wetherspoon was among the biggest risers on Wednesday (Gareth Fuller/PA)
Other top European markets rose gradually. Germany’s Dax rose 0.31%, while France’s Cac 40 was up 0.69% at close.
Early trading in the US was mixed with the S&P 500 down 0.1% and the Dow Jones up 0.2% by the time European markets closed.
The pound was roughly level against the US dollar at 1.250, and down 0.02% against the euro at 1.162.
In company news, JD Wetherspoon said soaring demand for Guinness from younger punters and recovering demand for ale helped the UK pub chain to higher sales over past three months.
As a result, the company’s founder and chairman Tim Martin said the firm expects annual profits to be “towards the top of market expectations”.
JD Wetherspoon shares were up 4.3% at the close.
Meanwhile, Boohoo insisted it is on the path to recovery after revealing a steep jump in annual losses and sales down by nearly a fifth.
The group reported pre-tax losses of £159.9 million for the year to February 29, against losses of £90.7 million the previous year.
Revenues tumbled 17% to £1.5 billion, which the firm blamed on its “increased focus on profitability and difficult market conditions”.
Boohoo shares fell in early trading but recovered to end the day up 0.1%.
The biggest risers on the FTSE 100 were IAG, up 6.6p to 184p, Beazley, up 19.5p to 662p, easyJet, up 14.6p to 524.8p, RS Group, up 21p to 808p, and Rolls-Royce, up 10.3p to 428.7p.
The biggest fallers on the FTSE 100 were Ocado, down 14.1p to 345.9p, Phoenix Group, down 9p to 508.5p, JD Sports, down 2.05p to 116.8p, Intermediate Capital, down 34p to 2146p, and Glencore, down 7.25p to 460.7p.