The FTSE 100 surged to fresh record highs on Friday as the index rode the coattails of an AI-inspired US tech rally overnight, which also saw the S&P 500 scale record levels.
UK investors will be delighted to see the FTSE 100 trading just a whisker away from 9,500 in a broad-based rally.
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“The FTSE 100 reached new record highs in early trading on Friday as investors shrugged off concerns about the US government shutdown,” said AJ Bell investment director Russ Mould.
“News of OpenAI’s valuation reaching $500 billion, making it the world’s most valuable private company, helped fire enthusiasm in the tech sector and push US indices to new records yesterday.”
The positive sentiment from the US seeped into the European session, and London’s leading index gained 0.7% to 9,490. The FTSE 100 is now 14.9% higher year-to-date and is on track for the best annual return since 2009, when the index rose 22%.
A pickup in IPO activity on Friday also helped lift the mood. The Beauty Tech Group made a strong start in its life as a London-listed company after listing at 271p in a £300m London Stock Exchange IPO, and the Princes Group announced its intention to list in London.
“The UK stock market has been starved of new blood in recent years, with IPOs being thin on the ground,” said Dan Coatsworth, head of markets at AJ Bell.
“It’s therefore encouraging to see activity levels start to pick up. Investors are keen for new stock ideas and two new listings have the potential to grab the market’s attention.”
The FTSE 100’s gains were broad on Friday, with around 80 of the FTSE 100 constituents trading higher at the time of writing.
Bunzl benefited from a broker upgrade, and shares soared 4% to the top of the FTSE 100 leaderboard. Schroders also enjoyed a positive broker rating and gained 3%.
There will be no Non-Farm Payrolls report today due to the US government shutdown, so investors will have to wait a little longer for the next economic data point and hints of further rate cuts.