San Francisco Frontiers - London stock market hits record high as global equities rally

The index jumped to 8,490.84 points, surpassing an intra-day record achieved in May last year of 8,474.41.

Around 1015 GMT, it stood at 8,484.67 points, up 1.1 percent compared with Thursday's close.

"After years of trying, and failing, to play catch up (with peers), the FTSE 100 appears to have finally caught the ball of investor enthusiasm," noted Susannah Streeter, head of money and markets at Hargreaves Lansdown.

"Although fresh volatility is expected on global markets after President (Donald) Trump returns to the White House, there may be more appetite to shelter in the resilience of the UK market."

Trump completes an extraordinary comeback Monday when he is inaugurated for a second term as US president.

While a strong US economy and earnings are helping to lift equities, there are concerns that Trump's planned tariffs and tax cuts could fire up inflation once more.

He has set his eyes on hitting in particular Chinese imports, which risks not only strong retaliation but further weakening China's economy, the world's second biggest after the United States.

Chinese share indices closed higher Friday after data showed China's economy grew slightly quicker than expected last year.

The five percent expansion was in line with the target set by Beijing but the weakest since 1990 -- excluding the pandemic years -- as leaders fought to address weak consumption and a painful debt crisis in the vast property sector.

A surge in the final quarter was helped by a string of stimulus measures and a boost in retail sales.

"Amid a relentless barrage of economic pessimism, China's economy defied expectations with a robust five percent growth last year, nailing the government's ambitious target," said independent analyst Stephen Innes.

"Although slightly outpacing analyst forecasts, this growth fell just shy of the 5.2 percent expansion seen in 2023, painting a picture of an economy with both promising highs and undeniable challenges," Innes added.

- UK concerns -

In London, stocks have been boosted in recent days by a drop in UK government bond yields after a spike in state borrowing costs last week sent the pound tumbling.

Sterling was lower Friday, reflecting ongoing strains for the British economy, which is struggling to grow despite falling inflation.

Official data Friday revealed a surprise drop to UK retail sales in December.

The FTSE 100 contains numerous multinationals whose revenues are largely earned in dollars, enabling them to profit from a falling pound.

"Weakness of sterling, which makes overseas earnings more valuable on repatriation, has led to the UK's primary index... (gaining) favour with investors," said Richard Hunter, head of markets at Interactive Investor.

London and its European peers -- along with Wall Street -- have won support this week also as traders forecast more interest-rate cuts this year from major central banks.

Indices have rallied also thanks to some positive company earnings and easing geopolitical concerns.

Oil prices rose slightly as Israel's security cabinet met Friday to vote on a Gaza ceasefire and hostage release deal that should take effect this weekend.

- Key figures around 1015 GMT -

London - FTSE 100: UP 1.1 percent at 8,484.67 points

Paris - CAC 40: UP 1.1 percent at 7,719.74

Frankfurt - DAX: UP 1.1 percent at 20,874.76

Tokyo - Nikkei 225: DOWN 0.3 percent at 38,451.46 (close)

Hong Kong - Hang Seng Index: UP 0.3 percent at 19,584.06 (close)

Shanghai - Composite: UP 0.2 percent at 3,241.82 (close)

New York - Dow: DOWN 0.2 percent at 43,153.13 (close)

Euro/dollar: DOWN at $1.0301 from $1.0306 on Thursday

Pound/dollar: DOWN at $1.2202 from $1.2237

Dollar/yen: UP at 155.64 yen from 155.17 yen

Euro/pound: UP at 84.41 pence from 84.18 pence

Brent North Sea Crude: UP 0.1 percent at $81.39 per barrel

West Texas Intermediate: UP 0.2 percent at $78.05 per barrel

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R.Baker--SFF