FTSE 100 Marks Record Gains in February

The FTSE 100 has achieved its largest monthly gain in over three years, climbing 6.7 per cent in February to surpass the 10,900-point mark for the first time. This index, which features the largest companies listed on the London Stock Exchange, rose by 63.85 points, or 0.6 per cent, closing at 10,910.55. This remarkable performance marks the 17th record closing so far this year.

The index’s rise is underpinned by a series of consecutive gains, including a notable 6 per cent increase in January. This upward momentum reflects the longest winning streak since 2013, signalling a robust market performance amidst evolving economic conditions.

Mining and defence stocks have played a significant role in this upward trajectory. The limited exposure of the FTSE to technology companies appears to have provided a safe haven for investors concerned about potential overvaluations in the AI sector.

In February, Schroders, an asset management company, surged by 30 per cent following a surprise £9.9 billion bid from Nuveen, a US asset management giant. GSK, known for its pharmaceuticals, rose by 18.2 per cent after investors responded positively to promising trial results and the new directions set by Chief Executive Luke Miels.

Rising prices for oil and precious metals, driven by increased tensions in the Middle East, have contributed to the impressive performances of heavyweight mining and defence firms. Notably, Fresnillo has tripled in value over the last eight months, with both Antofagasta and Endeavour Mining more than doubling their worth. All three companies continued their positive trajectories throughout the month.

The relative scarcity of technology stocks in London has proven advantageous, allowing the FTSE 100 to better withstand a sell-off affecting Wall Street. This sell-off has intensified in response to a lukewarm reception of Nvidia’s fourth-quarter results.

Buyback announcements have emerged as a prominent theme in the UK market, aiding share price growth. Recent reports indicate that Rolls-Royce, the London Stock Exchange Group, and British Airways owner IAG have introduced buyback programmes valued at £9 billion, £3 billion, and £1.3 billion, respectively.