The index is now up 5% year to date. Factors playing into the new year rise have included the weakness of sterling, strength in the dominant banking, mining and oil sectors, and some potential mergers and acquisitions.
Smiths Group has been a major contributor, rising more than 14% after the opening bell this morning following news it had responded to activist investor calls to split up its business. The company plans to sell its electronic connectors unit and said it would demerge or offload the detection operation.
Given the volatility this week on Wall Street as investors fret about DeepSeek’s impact on the future of AI spend, and the impact of Trump’s tariff plans, there’s been a flight to safer havens offering more reliable returns.
Fears that inflation could spike again have powered up gold prices, with the precious metal still trading around new record levels. Gold is viewed as a safe haven asset and is proving to be a big draw to investors looking to diversify portfolios.
This week saw Apple predict that its fiscal second-quarter sales will grow at a rate between single digits and mid-range single digits, indicating strengthening iPhone market demand.
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Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “With investors highly tuned into how artificial intelligence spend will represent real revenue for big tech, Apple’s results have provided a crunch of reassurance. Apple is more immune to the fretting over AI competition from China, given how it’s approached the opportunities artificial intelligence presents.
“It hasn’t spent the big bucks on building infrastructure, unlike its big tech peers, and instead has concentrated [on] infiltrating its hardware, notably iPhones with AI features.”
Richard Hunter, head of markets at Interactive Investor, said: “The reporting season is now in full flow and next week updates from the likes of Google owner Alphabet and Amazon will be closely monitored for any chinks in the Mag Seven armoury. In the meantime, as the first full month of the year draws to a close, each of the main indices have posted gains, with the Dow Jones ahead by 5.5%, the S&P 500 by 3.2% and the NASDAQ by 1.9%.
“Asian markets remain quieter with ongoing holidays in Hong Kong and Shanghai. In Japan, the Nikkei edged higher following some strong economic news flow, with the unemployment rate decreasing from 2.5% to 2.4% and with inflation rising to 2.5%, increasing the likelihood of a further interest rate hike from the central bank, which in turn strengthened the yen.”
