FTSE 100 smashes record again

Writing off the FTSE 100 is a dangerous game. Time and again, market commentators and City experts have called this over-valued index of multi-nationals lower, but it keeps bouncing back. And it's just done it again.

Less than four weeks ago, when Theresa May called the snap general election, the FTSE 100 plunged, bottoming out a few points below 7,100 and a multi-month low. It had made a new high at 7,447 just a month before.

This is the start of the great sell-off, we were warned. But 7,100 – the 23% Fibonacci retracement of the rally from post-referendum closing low - turned out to be major technical support.

Since then, the index has surged by as much as 364 points, or 5%, and on Monday hit a record high at 7,460.

Among the key drivers have been Mediclinic. The private hospital giant received a massive boost late last month, when the 20% co-payment for Emirati citizens treated in private hospitals in Abu Dhabi was abolished. The shares are up 17% since. Full-year results are due 24 May.

Budget airline easyJet's three-month recovery continues – it's up 16% in the past month – while AstraZeneca, Standard Chartered and Croda are among a number registering double-digit percentage gains.

Technical analyst and Interactive Investor contributor Alistair Strang predicted big things for the Footsie recently. With the index at 7,386, he said:

"Perhaps the 7,385 nonsense may prove valuable as, generally, the third time a trend is challenged is the charm. It results in the situation where anything near-term above this week's highs of 7,400 should present 7,439 as the initial ambition, maybe even 7,480 if such a level is bettered."

We also suggested big things were ahead after a chart breakout.

The big winners on this 'Record Monday' were miners, with Anglo American and Glencore leading the way, both up 3.2%, while BHP Billiton (2.4%), Antofagasta (2.3%) and Rio Tinto (2%) followed close behind.

BHP says it would drop the Billiton from its name as it underwent a AU$10 million (£5.75 million) marketing campaign, after a rise in metals prices. They were buoyed by Chinese president Xi Jinping's $900 billion promise to finance a 'belt and road' initiative to help boost infrastructure and trade links around the world.

The gold price climbed 5.8% to $1,223.50 Monday, with platinum up 12% to $993.11 and copper 2.4% to $254.80.

Broker Investec last week released a note outlining bullish views on the four big miners. Their near £16 target price on Anglo suggests huge potential upside of 50%. It likes Rio too, though, which remains their "preferred" diversified miner due to its robust balance sheet and the fact it offers the "best growth, solid cashflows and dividend upside".

Banks, meanwhile, continued their healthy recent run with both Standard Chartered, up 2.8%, and Barclays, up 2.1%, in the top five market movers. A little way down the list came rivals RBS (1.3%), HSBC (1.1%) and Lloyds (1%).

We've already noted how Lloyds has a new fan club in the City, with Neil Woodford tucking the high-street financial favourite into his Equity Income portfolio recently (and, no doubt, his new Income Focus fund, considering its tasty yield). Deutsche Bank has also upgraded its view on the firm.

For Standard, it was a welcome move upwards after Investec downgraded its recommendation from 'hold' to 'sell', though it did raise its target price to 690p. Shares ended Monday at 767p.

Oil prices also ticked up on the day, with Brent crude up 2.5% to $52.15 after the energy ministers of Saudi Arabia and Russia both suggested Opec could extend its output cuts into early 2018. This allowed oil majors BP and Royal Dutch Shell to climb slightly by 0.91% and 0.48% respectively.

By contrast, there was one clear loser: travel company TUI tumbled 4.5% after half-year results showed yet another loss, this time of €308.6 million (£262 million) – though down from H1 2016's €394 million.

The share price fall surprised broker UBS, who in a morning note to clients said they did not expect any significant share price reaction, with the company trading in line with expectations.

Other stocks to lose ground Monday included Next, down 1.9%; Direct Line, down 1.7%; and Imperial Brands, down 1.5%.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.