FTSE Powers To New Record High

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Written By Farid Shojaei

Pension savers can breathe a sigh of relief as the FTSE100 nudged back over the previous record high to close at 7787 points.

That’s was a rise of 53 points over the previous day and just over the 7778-point previous record passed in January.

But the FTSE failed to stick and tumbled back to 7068 before rising again.

A rising Footsie means savers will see share prices and dividends rise, swelling their retirement pots.

The FTSE along with other leading global share indices had been weighed down by gloomy fears that US President Donald Trump was leading the world economy back into a tit-for-tat trade war that pushed the index down.

But the FTSE bounced back, mainly fuelled by Brexit.

Brexit boost

Since June 2016, when the vote to leave the UK was announced, the FTSE has put on more than 1000 points to soar to a record high.

The reason is most of Britain’s largest companies represented on the index earn their revenues in foreign currency and have seen their profits surge since the pound plunged shortly after the referendum.

Sterling has failed to recover against the US dollar and Euro mainly because of Prime Minister Theresa May’s indecisiveness over Brexit negotiations.

Nevertheless, the Pound had crawled to a post-Brexit referendum high of $1.35 before the Bank of England revealed the economy had stalled with growth of just 0.1% in the first three months of the year.

Traders prediction dashed

A poll of traders by Reuters found that few had believed the FTSE would reach a new high for at least two years – only to find their prediction shattered within a few days.

Laith Khalaf, a senior analyst at investment platform Hargreaves Lansdown, said: “The death of the bull market has been greatly exaggerated, not for the first time in recent history.

“The Footsie did endure a shaky start to the year, but after two months of steady climbing, has now regained and surpassed its previous high.

“A stronger dollar, a rising oil price and the postponement of an interest rate rise can all claim some credit for the recent strong showing from the stock market.

“Investing is a long-term game, and the twists and turns along the way are less important than the final destination.”