Will it remain there?
This morning saw the UK stock market's flagship index reach a new high, but will the FTSE 100 continue to rise as investor confidence in the country declines?
The FTSE 100, which is an index that includes the top 100 companies in the United Kingdom, closed at its highest point ever last night (July 21), closing a session above the 9,000 mark for the first time ever.
The leading stocks in the UK, including Rolls-Royce (LON:RR). ), BP (LON:BP. With Glencore (LON:GLEN) and other companies included in the index, the FTSE 100 is a crucial indicator of the state of the UK economy.
From novices to seasoned stock market professionals, all British investors will be closely monitoring the index. Index-tracking funds are among the best options for novice investors.
The FTSE 100 closing above 9,000 is therefore good news. This morning, July 22, it opened below 9,000, but it has swiftly recovered to be above the threshold.
Matt Britzman, a senior equity analyst at Hargreaves Lansdown, stated that investors are considering both the most recent public borrowing figures and new company results.
According to Chris Beauchamp, chief market analyst at IG, "the achievement highlights the resilience of UK equities despite ongoing economic challenges and political uncertainty." "This consistent increase over the course of the year has been facilitated by key players such as banks, consumer staples, and energy giants.
While hitting the 9,000 mark is one thing, British chancellor Rachel Reeves will be particularly hoping that the FTSE 100 can continue to hold these levels. Given a recent survey showing a decline in investor confidence in the UK, that might prove difficult.
What caused the FTSE 100 to surpass 9,000?
The FTSE 100's first close above 9,000 was due to strong sector-wide growth.
Gains yesterday and this morning have been driven by a number of particular events.
Yesterday, it was mostly about the miners. The mining stocks in the index rose in response to rising iron ore prices.
AJ Bell investment analyst Dan Coatsworth stated, "Mining shares usually get a boost when commodity prices rise and/or there is good news from China, which is one of the biggest users of metals and minerals worldwide." Today, both were in action.
"China is pushing forward with a hydropower project worth £167 billion that will require a substantial amount of building materials," Coatsworth added. Miners like Anglo American (LON:AAL) and Rio Tinto (LON:RIO) have seen an increase in their stock prices as a result.
The news that Centricas (LON:CNA), an energy company, will acquire a 15% equity stake in the Sizewell C nuclear project represented "a major endorsement of Britains nuclear energy future" and caused its shares to rise more than 4% this morning, according to Beauchamp.
The £50 billion investment that AstraZenecas (LON:AZN) plans to make in the US and the ongoing pressure from activist investor Elliott on BP's new chairman to address the oil major's operational issues were also highlighted by Beauchamp.
Is it possible for the FTSE 100 to reach 9,000?
The SandP 500 has gained 7% in 2025, while the FTSE 100 has gained over 10% so far.
It is debatable whether or not that can go on. It appears that investors' outlook on the UK is deteriorating.
Even though investor confidence in growth in every other region increased in July, the Hargreaves Lansdowns Investor Confidence Index showed a 26% decline in investor confidence in UK economic growth.
According to Kate Marshall, lead investment analyst at Hargreaves Lansdown, "this isn't a huge surprise given economic and political stability has been called into question." In addition to rising business expenses and a slowing GDP, the UK's fiscal credibility has been damaged by the Labour party's policy reversals.
However, the index is not always significantly impacted by the strength of the UK economy. Its component businesses generate over 80% of their revenue from overseas sources.
"Yes, some of the constituents, like the telecom company Airtel Africa (LON:AAF), make all of their sales overseas," says Jemma Slingo, who works at Fidelity International as a pensions and investment specialist.
There is uncertainty as to whether the FTSE 100 will continue to trade above 9,000. As of right now, however, Slingo notes, the index is inexpensive in comparison to its foreign counterparts and provides comparatively high dividend yields.
For investors who believe the time is right to buy, our explainer of the top stocks in the FTSE 100 offers advice on how to increase exposure to the index.
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