The FTSE 100 finally returned to its original position in the first quarter of last year, before it crashed due to panic selling caused by Covid-19.
The blue-chip index, which was trading on London’s first day since Christmas broke, rose to 7457. It then closed up 48.59 at 7420.69.
This was the most recent level of activity since February 2013 and signifies that the Footsie has now recovered its entire pandemic loss 22 months ago.
Recovery: The blue-chip index rose 48.59 points to 7457 on the first trading day in London after the Christmas break. It closed at 7420.69 with 48.59 remaining.
One of the worst sell-offs in history saw the benchmark lose a third its value within four weeks and plummet below the 5000 mark. But it has gained 49 per cent since and is up 15 per cent so far this year.
As investors cheered Boris Johnson’s decision to not impose any restrictions prior to New Year’s Eve, fears about the Omicron version eased. This led to the latest rally.
Russ Mould is an investment director for stockbroker AJ Bell. He stated: “The FTSE 100 now provides a mid-teens percent gain in 2021 with additional cash returns through dividends, special dividends, and buybacks. I believe anyone would have accepted that, if they were offered it a year back.”
Brent crude reached $80/barrel for the first-ever time since Omicron’s emergence.
Since the pandemic started, oil prices have soared on commodities markets. They fell while lockdowns crippled the global economy. Then they rose again as signs of recovery.
Brent crude – the key London benchmark on the oil markets – fell below $20 a barrel in April last year but was trading at over $86 two months ago.
Jeffrey Halley from Oanda was a market analyst. The market is pricing Omicron’s latest version as the milder variant, despite it being easier to contract.
“Investors still tentatively believe that a global recovery will hit a small bump and not a major pothole.” The Footsie is still below the May 2018 record of 7900, despite the rally.
However, leading benchmarks in Europe or the US have reached record trading levels after surpassing pre-Covid peaks several months back.
The FTSE 250 – a better barometer of the British economy than the FTSE 100 as its constituents are more domestically focused – also recovered its pandemic losses far earlier.
It rose another 246.84 points to 23,517.27 yesterday, leaving it 8 per cent above where it was pre-Covid but 3 per cent off its September peak.
While US markets were boosted by an abundance of technology stocks that have boomed during the pandemic – such as Apple, Amazon and Microsoft – the FTSE 100 is dominated by miners and banks.
Analysts warned, too, that Brexit worries would continue to slow down the UK’s market.
Mould said, “The FTSE 100 was slower to regain ground lost in the initial panic post-pandemic of spring 2020, and it has yet set any new all time highs this year unlike, say, the US or France, Germany, or India.”
“Some of the above may still pertain to Brexit. There is still much to be debated about the pros and cons for the long-term, but that will all become clearer as time goes on.