Britain’s blue-chip index has been on a tear, notching up new record highs for 14 days in a row. It is the first time this has happened since the FTSE 100’s inception in 1984.
The sinking pound has boosted earnings prospects, as the FTSE’s members make around 70% of sales overseas. The index has only just moved past its 1999 peak, however, and has some catching up to do.
In the past few years it has lagged major global counterparts such as Wall Street’s S&P 500 index. The FTSE is unusually skewed towards commodities, so the oil and metals bear market has been a major headwind.
Viewpoint
“[Germany] is celebrating the 500th anniversary of [Martin Luther] issuing his 95 theses… and… pinning them to the church door… A familiar thesis links Luther to German attitudes towards money. In this view Catholics, used to confessing and being absolved after each round of sins, tend to run up debts (Schulden, from the same root as Schuld, or ‘guilt’), whereas Protestants see saving as a moral imperative. This argument, valid or not, has a familiar ring in southern Europe’s mainly Catholic and Orthodox countries, which have spent the euro crisis enduring lectures on austerity from Wolfgang Schäuble, Germany’s devoutly Lutheran finance minister.”
The Economist