The FTSE 100 Index has hit new record highs, buoyed by a slew of better-than-expected results from blue-chip companies that helped offset pressures from the ongoing Iran war. On Thursday, the index reached an intraday high of 10979.24, although it lost momentum in afternoon trading to close at 10,897.27, down 11.14 points from Wednesday's close.
Recovery After February Dip
The index remains near its previous closing peak of 10,910.55, seen on February 27, the day before the Middle East conflict began. When the US and Israel launched strikes against Iran on February 28, Britain's top share index fell sharply, sending oil and energy markets into turmoil. However, the FTSE has gradually recovered, boosted by higher oil prices that lifted heavyweights like BP and Shell, and by defence stocks such as BAE Systems benefiting from increased global defence spending.
European and US Markets Also Up
Indices across Europe also made gains on Thursday, while Wall Street moved higher in early trading. This comes despite a volatile technology sector and fears over an AI bubble bursting, which has weighed on US tech stocks in recent months.
Kathleen Brooks, research director at XTB, said: “In contrast to the turmoil in tech-heavy spaces, the FTSE 100 has surged to a record high, and is higher by 4.5% in the past month. Its mix of energy stocks, defence names and consumer staples are attractive in the current environment.” She added that indicators suggest there could be “further upside for the UK index as investors rotate away from global tech names.”
Rolls-Royce and BAE Systems Lead Gains
An earnings guidance upgrade from engine maker Rolls-Royce helped spur the FTSE to its new record, with shares up 6%. Fellow defence giant BAE Systems also raised its full-year outlook, driving the stock up 2%. Shell delivered better-than-forecast second-quarter results, though it failed to hold onto early session gains.
Not all news was positive: pest control group Rentokil Initial saw its stock market value plunge more than a fifth after warning of weaker residential demand in North America, its biggest market. Rentokil kept its full-year outlook intact, but shares fell 21%.
