The FTSE 100 has been tipped to hit 10,000 within days after soaring to a record high.
In another upbeat session for investors, London’s blue-chip index topped 9900 for the first time before ending the day up 1.2 per cent, or 112.45 points, at 9899.6.
That eclipsed the record close of 9787 set just 24 hours earlier and took gains for the year to 20 per cent – outstripping those of the major US exchanges.
The rally fuelled hopes the Footsie is on the verge of reaching the 10,000 mark for the first time – despite fears an artificial intelligence-driven tech stock bubble may be about to burst.
Dan Coatsworth, head of markets at broker AJ Bell, said: ‘The FTSE 100 is within a whisker of hitting 10,000 and it could only be a matter of days before reaching this triumphant level.
‘It’s been an historic year as the FTSE 100 has outperformed all the major US stock indices. Hitting 10,000 would be the cherry on top, proving to cynics that the UK market is not stuck in the mud.’
Rally: London’s blue-chip index topped 9900 for the first time before ending the day up 1.2% at 9899.6 as it approaches the historic 10,000 mark
This week’s gains have been driven by signs that the longest US government shutdown of all time is finally coming to an end after more than 40 days of semi-paralysis in the world’s largest economy.
Republicans and Democrats in Washington are closing in on a deal to fund the federal government until the end of January – allowing work to resume.
Hopes of interest rate cuts in the UK – on the back of yesterday’s dismal jobs figures – further boosted sentiment on the stock market even as the economic gloom deepened.
Victoria Scholar at broker Interactive Investor said: ‘It looks like Santa could come early with the potential for the index to push above resistance at 10,000 for the first time before the end of the year.’
Analysts said the Footsie may at last be shrugging off its reputation as the ‘Jurassic Park’ of stock exchanges – a view spawned by a heavy weighting towards older industries such as banking, mining, oil and defence rather than fast-growing tech firms.
Among the best performers this year are gold miners Fresnillo and Endeavour Mining and defence and engineers Babcock and Rolls-Royce.
Jemma Slingo at Fidelity, said: ‘The index’s performance this year has challenged the idea that London’s market is a “dinosaur”, and investors are beginning to take notice.
‘What’s interesting now is that the FTSE 100’s “old fashioned” make-up is starting to work in its favour.’
Vodafone led the way yesterday, rising 8.3 per cent, after it raised its dividend for the first time in eight years.
And AstraZeneca cemented its status as Britain’s biggest firm with shares rising 2.6 per cent to a record high of 13,466p – giving it a value of £207billion.
‘Lots of people have criticised the UK for being an old economy market, full of boring companies in the banking and natural resources sector,’ said Coatsworth.
‘Yes, it lacks the excitement of go-go-growth stocks omnipresent in the US, but boring can also be beautiful when it comes to investing.’
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