FTSE 100 hits fresh record high as metal prices recover
Oof! Britain’s stock market has now shrugged off its earlier worries, and hit a new alltime high.
With the slump in metal prices easing, the FTSE 100 has bounded ahead to hit a fresh record peak of 10,298 points, up 0.7% today.
Mining companies have recovered most of their earlier losses, helped by a moderate recovery in precious metal prices after their tumble early this morning.
Key events
FTSE 100 closes at record high despite gold sell-off
And finally…. the UK’s blue-chip share index has closed at a new all-time high.
The FTSE 100 has ended the session at a fresh peak of 10,341 points tonight, as traders piled into retailers, banks, airlines and hospitality firms.
The Footsie earlier touched a new intraday high of 10,345 points, as traders brushed off concerns about the selloff in precious metals, oil and crypto assets.
JD Sports (+6%) was the top riser on the FTSE 100, followed by Intercontinental Hotels (+4.1%).
Airline group IAG (+3.6%) benefitted from the drop in the oil price today, while AstraZeneca (+3.2%) after its shares also began trading in New York for the first time today.
Stocks gained despite the weakening precious metals prices – gold is down 3.8% today at $4,676 an ounce, and silver is down 6.8% at $79 an ounce.
That hit bullion producer Endeavour Mining (-2.6%), who were the top faller.
Fawad Razaqzada, market analyst at City Index, says gold has experienced a “brutal correction”, after soaring in recent weeks.
“The gold forecast has shifted dramatically over the past few sessions. After racing to fresh all-time highs last week, gold suffered a violent reversal towards the end of last week. That volatility carried through to today’s session, with prices plunging by almost 10% at one point before finding some tentative support. While both gold and silver managed to bounce off their lows once European trading got underway this morning, the damage has clearly been done from a technical perspective.”
“From a macro perspective, several of the key drivers that pushed gold higher are now starting to fade. One of the biggest bullish themes had been concerns about US monetary policy credibility, especially with political pressure on the Federal Reserve and persistent calls for rate cuts.”
“The next big test for the gold forecast will come from US macro data. This week is packed with key releases, including ISM surveys, JOLTS job openings and, most importantly, Friday’s US non-farm payrolls report. Ahead of those, we saw the ISM manufacturing PMI data come in stronger, showing US manufacturing activity expanded at the fastest pace since 2022. This kept the dollar on the front foot.”
Goodnight. GW
Britain’s share index of medium-sized companies, the FTSE 250, has also had a solid day.
The FTSE 250 index is up 100 points, or 0.43%, at 23,353 points in late trading, led by cruise operator Carnival (+7.5%).
Encouragingly, European stock markets are also rallying this afternoon.
Despite earlier anxiety about the dorp in precious metals prices, Germany’s DAX is up 1% with France’s CAC 0.7% higher and Italy’s FTSE MIB gaining 1.1%.
350 job cuts at GSK
Julia Kollewe
Drugs giant GSK is cutting up to 350 research & development jobs across the UK and US as part of an overhaul of the division.
The cuts are a result of a process started following the spin-off of its consumer health business Haleon in mid-2022, to bring together medicine and vaccine development.
Around 50 jobs will go at GSK’s main research centre in Stevenage, staff have been told, but there will probably be more job losses in the UK, along with cuts in the US in the next couple of months. GSK employs a total of 12,000 people in R&D globally.
A GSK spokesperson said:
“GSK R&D investment has risen by almost 90% over recent years (to £6.4bn in 2024) and we expect it to increase further as we focus on delivering our pipeline of new medicines with multi-blockbuster potential before 2031.
As we increase investment, we’re focused on allocating resources to these priorities and making sure we have the right people in the right teams. Alongside this, we’re investing in technology to maximise our scientific capabilities and drive productivity, and in our key R&D sites over the next five years to accelerate drug discovery and research.”
The pound has slipped to a one-week low against the US dollar.
Stering is down almost half a cent now at $1.365, the lowest since last Monday.
Capital Economics: rates may not fall as fast if Starmer or Reeves replaced
UK interest rates might be cut three times this year, analysts at Capital Economics suggests – unless Keir Starmer or Rachel Reeves are bundled out of Downing Street and replaced by a less fiscally-responsible PM or chancellor.
In a new note, their UK economist Alex Kerr says:
The data published since the start of the year suggest economic activity and price pressures have strengthened. But we still expect annual GDP growth to slow and the weak labour market to weigh on price pressures. This and the smaller rises in regulated prices this year than in 2025 mean we think CPI inflation will fall below the 2.0% target this year and stay there.
That will allow the Bank of England to cut interest rates from 3.75% now to 3.00% this year, rather than to 3.50% as investors anticipate. That said, if Starmer and/or Reeves were to be replaced by a top team in favour of higher public spending then interest rates may not fall as far.
Encouraging news from the US economy!
America’s factory sector picked up last month, according to two polls of manufacturing purchasing managers.
S&P Global’s PMI survey has found there was a “notable upturn in production” despite subdued sales growth in January. It found that production rose last month at the joint-fastest pace since May 2022.
A rival PMI survey from the Institute of Supply Management also shows that economic activity in the US manufacturing sector expanded in January for the first time in 12 months, with new orders and production growth both rising.
Britain’s FTSE 100 share index is putting on another spurt.
It’s now climbed over the 10,300-point mark for the first time, hitting 10,337 points – up over 1% today.
Wall Street opens flattish as dollar rallies
Ding ding goes the opening bell on the New York stock exchange, as Wall Street opens softly as the metals selloff eases.
The S&P 500 share index, which tracks five hundred US companies, is flat in early trading – shrugging off fears of a loss earlier today.
The Dow Jones industrial average has gained 0.25%, or 115 points, to 49,007.93.
And the US dollar is now up 0.55% as traders react to the prospect of Kevin Warsh running the Federal Reserve.
Enrique Diaz-Alvarez, chief economist at global financial services firm Ebury, suggests the bounce may have further to run:
“The appointment of Kevin Warsh as the next chair of the Federal Reserve seems to have helped stop the rot for the dollar.
“While Warsh has recently aligned himself with Trump in calling for a lower fed funds rate, the fact that he was previously seen as a hawk during his stint as a Fed governor in the late-noughties means that he is probably less likely to advocate for aggressive cuts than messrs Hassett and Reider.
“His appointment may also act to calm fears over Fed independence, given that he has been a vocal advocate of preserving central bank autonomy in the past. Of course, any pick by the president will be regarded as a Trump loyalist to some extent, but we certainly view the Warsh appointment as the lesser of three evils.
Good news – possibly – for chocolate lovers.
The wholesale price of cocoa has fallen around 5%, with Bloomberg reporting that cocoa futures are the lowest level since November 2023.
They report:
The most-active contract fell as much as 5.4% to trade below $4,000 before paring losses. Futures are down more than 30% this year on worries over demand destruction and the potential for a bigger-than-expected surplus.
If that’s passed onto consumers, then there could be relief for shoppers after chocolate prices surged last year: