London’s stock market is on the verge of breaking its all-time high
🚩The London Stock Exchange (FTSE100) is very close to its all-time highs (7,877 points) as it started the day on Wednesday (9:18 am) at 7,863 points. This is very peculiar considering that the UK is in an inflationary spiral, political chaos (last year there were 3 prime ministers) and even in a period of British crown takeover.
🚩Currently, the British country is in a delicate situation, as inflation is coming from both the demand side (too strong labor market) and the supply side (lack of energy independence). This, coupled with the still-present Brexit fallout, leaves the British economy on the brink of recession.
🚩This upward trend in the stock market can be explained by the composition of the English index: its main companies are multinationals, such as BP, Shell, AstraZeneca, Unilever and HSBC, that generate a significant part of their revenues outside UK. In addition, these international companies are benefiting from the weakness of the pound, which makes them more competitive abroad.
🚩Finally, it should be added that the current political and macroeconomic situation has particularly benefited sectors such as energy, mining, and pharmaceuticals, which have a significant weight in the FTSE100.