- The FTSE hits yet another new record high.
- Mining stocks led the rally.
- Investors liked yesterday's news from the US Fed, which signaled caution on further interest rate rises.
- Bank of England left interest rates unchanged at 0.25%, but took a slight hawkish turn.
- The markets also liked the fact that in the Netherlands, nationalist populism took a setback as Geert Wilders failed to win a general election there.
LONDON — The FTSE 100 hit at a record high on Thursday, pushed higher by mining firms listed in the UK, and closing at 7,415.95 points — a new best.
Miners gained early in the day thanks to a rally in commodity prices, driven partially by the US Federal Reserve sounding a more cautious than expected tone on further interest rate increases in 2017.
The Fed raised the benchmark federal funds rate 25 basis points, to a range of 0.75% to 1% on Wednesday evening, and said it continues to expect two further hikes in 2017. Some had expected the central bank to signal three more hikes.
The FTSE's rally came "thanks to investors ignoring the Fed’s rate hike to concentrate on an unchanged outlook. Forecasting just two more hikes this year, markets have digested the policy update as less hawkish than it could have been. A USD sell-off has thus helped Oil and metals extend rebounds," Mike van Dulken, head of research at Accendo Markets wrote in an email on Thursday morning.
As a result, the FTSE 100 broke its records for both closing and intraday levels, ending the day at 7,415.95 points, having hit 7,445 points at around 11.15 a.m. GMT.
Here is the chart:
The bourse's top five stocks on the day were all mining and commodity focused firms, with platinum and diamond-focused miner Anglo American at the top of the pile, up by 8.5%. Four other miners, Glencore, Antofagasta, Fresnillo, and Rio Tinto, gained between 3.3% and 4.8% on the day.
British stocks were little moved by the Bank of England's decision to leave interest rates unchanged at 0.25%.
Elsewhere in Europe, stocks also charged higher, taking heart not just from the Fed's less hawkish tone but also from a broad rejection of populism by voters in the Netherlands.
The party of far-right leader Geert Wilders had been forecast by some to win the most seats of any party during the elections, but the PVV came second, gaining just 20 seats. By contrast, incumbent Prime Minister Mark Rutte's VVD won 33 seats, nine fewer than in the 2012 election.
That has cheered investors, and stocks were green across the board. Amsterdam's AEX index hitting its highest level since before the financial crisis on Thursday morning, while Italy's FTSE MIB rallied to its best level since early 2016.
Here's the scoreboard:Investing.com
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