FTSE 100 Continues Pre-holiday Rally: Is 8000 in Sight?

FXOpen

Almost a year ago, the FTSE 100, which is a prestigious index comprising the most prestigious blue-chip stocks of companies listed on the London Stock Exchange, hit 8,000 points for the first time in history.

The euphoria that accompanied this historic breakthrough in mid-February 2023 echoed a similar response in 2021 when the index broke the 7,000 barrier for the first time ever. However, the brief venture above the 8,000 mark was relatively short-lived, and since then, the FTSE 100 index has languished anywhere between the mid-7,200 range up to the 7,700s during the last three quarters of this year.

Before the markets made their annual break for the holiday season that has just passed, the FTSE 100 index began to show a steady upward climb, which has been relatively consistent since October 27's low point of 7,259 at FXOpen<!--

Now, with the markets reopening this week, the FTSE 100's upward direction has continued to demonstrate buoyancy, and the possibility of reaching the lofty heights of 8,000 points is once again being openly discussed by market participants.

As the London trading session opened this morning, the FTSE 100 index jumped from 7,715 to 7,742 at FXOpen, giving further weight to opinions in mainstream media last week that a revisitation of the 8,000 mark may be in sight.

The reasons for this rally are being viewed by many analysts and commentators in a very basic form, largely centred on the possibility that central banks in Western continents, in which the main headquarters of companies listed in London and included in the FTSE 100 index, may reduce their interest rates as the talks about ending the prolonged policy of increasing them over recent years in an attempt to counter inflation.

In Europe and North America, the central bankers have taken a very hard line on inflation and continued to increase rates even though inflation had been reducing and under control for some months, causing a cautious line to be taken by investors as well as corporations which may have found their monthly commitments costing more over this period.

With reduced rates, more disposable income for corporate growth would arise, hence the assumption that a rise to over 8,000 for the FTSE 100 may take place.

This is a very simplistic approach and could be an easy assumption. However, there is far more to it than just assuming that central bank policy is the only driving factor as we head toward 2024.

The FTSE 100 index is, unlike the tech-centric NASDAQ in New York, very traditional, with large, well-established corporate giants represented. The sectors are much less volatile and more bricks-and-mortar focused, with some companies having been established for hundreds of years.

Banks, large construction companies, entertainment giants, telecommunications firms, retail magnates, and supermarket conglomerates make up some examples of sectors included, and these have been doing reasonably well in the United Kingdom recently.

The overall stability of the British economy - no bank demises or near misses with national debt ceilings - and a steady output with the cost of living crisis being managed by the stoic nature of the British workforce, which is renowned for its resilience, has been testimony to the strength of an island which represents one of the largest and most influential economies in the world.

The current climbing nature of the FTSE 100 index is interesting indeed. There is only one way to find out if it actually does reach 8,000 points in early 2024, and that is to track its progress.

Trade global index CFDs with zero commission and tight spreads. Open your FXOpen account now or learn more about trading index CFDs with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Indices

Nasdaq-100 Price Hits All-time High after 4 Straight Months of Gains European Stock Markets on All-Time Roll Despite Economic Bleakness Nvidia's Successes Helps S&P 500 Price Reach Its All-time High S&P 500 Inches Down After Long Rally as FOMC Minutes Approach NASDAQ Price Declining Ahead of NVDA Report

Latest articles

Financial Market News

Weekly Market Wrap With Gary Thomson: CAC 40, AUD, OIL, AMAZON

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of  FXOpen UK, as he breaks down the most significant news reports and shares his expert insights. European Stock Markets on

Commodities

Price of Gold Briefly Exceeded $2,050 per Ounce

In addition to new records in the stock markets, the reaction to yesterday's news about inflation in the US was also a decrease in government bond yields and a rapid rise in the price of gold — the cost of XAU/

Indices

Nasdaq-100 Price Hits All-time High after 4 Straight Months of Gains

The Nasdaq-100 index is holding above 18,000 today following yesterday's bullish momentum, fueled by inflation news. The PCE consumer spending index amounted to 0.4% on a monthly basis, which was in line with analysts' expectations. A year ago,

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65.68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.