New York’s top share index hits record highs after US inflation cools

12 June 2024, 17:24

A sign saying Wall St in front of the New York Stock Exchange
Travel Stock – United States of America – New York. Picture: PA

The FTSE 100 climbed 67.67 points, or 0.83%, to 8,215.48 on Wednesday.

New York’s top share index has touched fresh all-time highs and London’s clawed back some of its recent losses after new data from the US showed that inflation continued to drop last month.

The UK’s FTSE 100 climbed 67.67 points, or 0.83%, to 8,215.48 on Wednesday.

It marks a reversal of its performance on Tuesday when shares dropped by 1% in one of the worst days for the index in recent months.

Global markets were fired up with investors in good spirits amid better-than-expected inflation figures coming from the world’s biggest economy.

Official figures showed that Consumer Prices Index (CPI) inflation slowed to 3.3% in America in the year to May, down from 3.4% in the year to April, and below the 3.4% some economists had been forecasting.

It sent shares surging when top US markets opened on Wednesday.

The S&P 500 was up by about 1.2% by the time European markets closed, hitting a new all-time high for the index. The Dow Jones was up about 0.3%.

Other top indices in Europe also had a good day, with Germany’s Dax closing 1.49% higher and France’s Cac 40 up 0.97%.

Dan Coatsworth, investment analyst at AJ Bell, said that “investors have simply concluded that softer inflation means we’re on the right path towards cuts”.

“Equities bounced on the new but we’ve been here plenty of times before,” he said.

“While inflation is slowing, it remains well above the 2% target and so one shouldn’t expect a rate cut at the Fed’s meeting later today.”

The pound jumped by 0.8% against the US dollar at 1.284, and fell 0.2% against the euro at 1.184.

In company news, global pest control firm Rentokil jumped to the top of the FTSE 100 after it emerged that activist investor Nelson Peltz had amassed a significant stake in the business.

His investment firm Trian said it had reached out to Rentokil to “discuss ideas and initiatives” to boost its share price, which perked up investors following a period of weakness for the company’s shares.

Shares in Rentokil were up as much as 16% during the day and closed 13.7% higher.

On the other end of the scale, shares in HSS Hire dropped after the company revealed that a major client had decided to walk away from a long-running contract.

The agreement with Amey had accounted for about a 10th of the firm’s earnings last year, it said, leaving questions as to how it plans to fill the gap in its income.

Shares in HSS were 13.6% lower at close.

The biggest risers on the FTSE 100 were Rentokil, up 57p to 472.2p, St James’s Place, up 25p to 533p, Howden Joinery, up 35p to 895p, Persimmon, up 56p to 1,498p, and 3i Group, up 112p to 3,082p.

The biggest fallers on the FTSE 100 were Legal & General, down 13.3p to 229.8p, B&M European, down 11.7p to 473.3p, Vodafone, down 1.1p to 69p, Smurfit Kappa, down 48p to 3,542p, and BP, down 3.45p to 464.9p.

By Press Association