FTSE 100 Index Surges Above 8000, Shrugging Off Recession Fears

Summary:
• FTSE 100 Index has created a new all-time high in 2023. The rice of benchmark UK Index has surged above 8000 points.

FTSE 100 index (INDEXFTSE: UKX) has been one of the best-performing indices in the past 6 months. Since October 2022, FTSE 100 has soared by more than 18%, also breaking above its last year high. The bounce also got its strength fro the ongoing recovery in US equities.

What is FTSE 100?

FSE 100 stands for Finacial Times Stock Exchange 100 index. It is the benchmark UK index that tracks the 100 biggest companies listed on London Stock Exchange. It’s been around since 1984 and acts as a strong economic indicator in the UK. FTSE 100 companies include heavyweights like AstraZeneca, Shell, HSBC Holdings (HSBA), and Unilever Group.

In 2023, FTSE 100 has created a new all-time high by surging above 8000 level for the first time in February. INDEXFTSE: MCX tagged a high of 8047 last Thursday in the historic first. The recent bullish price action is surprising for many investors as the fears of a recession are looming globally. However, it is not the only index performing well, S&P 500 Index and NASDAQ 100 Index have also posted similar gains in 2023.

FTSE 100 News Today

The US Bureaue of Labor Statistics has recently revealed the January PPI data. The Producer Price Index for final demand upticked by 0.7% in January 2023. This, together with other data, suggests that the economy remains strong even after several rate hikes in 2022. Consequently, analysts at Goldman Sachs are expecting another 3 25 basis points hike in 2023.

FTSE 250 has also shown a significant recovery since its 2022 low, but it is yet to break above its 2021 all-time high. Analysts are attributing the current price action of FTSE 100 index to the recent boost in miner stocks.

FTSE 100 Daily Chart

The chart of FTSE 100 shows a continuation of the uptrend that started after the March 2020 crash. Since then the benchmark UK index has soared by more than 68%. It is one of the few indices that have made a new all-time high in 2023, as the US indices are still lagging.

Although the INDEXFTSE: UKX has created a new all-time high but it is still struggling to hold the psychological level of 8000. If the price closes a few weeks above this level, then the uptrend is likely to continue. However, in the current economic scenario, the trend is not very likely to last long as inflation still remains high.