The economic and political conditions, which were seen at Britain’s benchmark, exceeded the peak that it sustained just prior to the dotcom bubble burst.
The FTSE 100 last week broke a record that it stood for more than a decade when it hit a new all-time high.
Britain’s benchmark index of leading shares soared as high as 46.73 points to 6, 958, a 0.7pc progress that means that the FTSE 100 finally exceeded its previous intraday peak of 6,950.06 that was set on December 30, 1999, just moments before the dotcom bubble burst.
Two records which were both set in the final trading day of the last decade fell last week along with reaching a new intraday high by concluding the day at 6,949.63 which was up 37.47 points, the FTSE 100 also reasonably did well with its previous closing record of 6,930.2.
The new peak simply means that the British index which was launched last January 1984, finally assembled with its peers in the U.S. – the S&P 500 and the Dow Jones Industrial Average and Germany’s DAX in sustaining fresh new highs. Since the FTSE 100 is heavily weighted towards shared resources, which have been badly hit, by plunging metal and oil prices, it has failed to carry other indices, including the mid-cap FTSE 250.
It probably will bring about a little optimistic-good factor. Globally, there was quite a few of several other indices carried on after they attained new highs.
The FTSE 100 at present is not the same index that set the peak back in 1999. FTSE Group reviews its indices every quarter and so the composition of the FTSE 100 changes on a regular basis.
Mining, gas and oil prices account for more than a fifth of the specific index which was a much larger component of the FTSE 100 than it was fifteen years ago back then when there were far more telecommunications, media and technology (TMT) shares such as Logica and Marconi.
They were riding the peak of a TMT wave. It was good at a certain point when there were so many millionaires made between the years 1998-1999 alone.
On the first trading day of the year 2000, however, the FTSE 100 cascaded 3.8pc and by the end of 2001, the index slid to 5,217 as the dotcom boom lost its foothold.
It would be foolish to follow suit and cut exposure to the index with the new record inevitably raising sensitive questions about how sustainable it is and whether it has gotten ahead of the pack. Whether or not this is considered an indication to sell, analysts are firm in their opinion that there is no strong indication of such.
The FTSE once again is back to its 1999 level but the earnings picture is quite different. Earnings are 99pc higher than they were back then and it is akin to a buy one as compared almost two decades ago.
Considering a long position on FTSE 100? Try financial spread betting account (losses can exceed your deposit).