U.K. Stock Exchange Hits Record High as Investors Pile into European Equities

The United Kingdom’s leading stock exchange, London’s FTSE 100, has hit a record intraday high as investors shift money into European equities.

The U.K.’s mining-heavy FTSE 100 index is up 1.1%, surpassing a record intraday high of 8,484 points. The index got a boost from media reports that miner Glencore is in talks with rival Rio Tinto (RIO) about merging in what would be the biggest consolidation ever in the mining sector.

At the same time, the pan-European Stoxx 600 index is up 0.6%, with nearly all sectors and exchanges in positive territory as investors move capital into European stocks. The British market is also getting a boost from growing expectations for further interest rate cuts from the Bank of England.

Rate Cut Expectations

Recently released data showed that economic growth across the U.K. in November was weaker than expected, while inflation declined to 2.50%. The situation has markets pricing in 70-basis points of interest rate cuts in the U.K. this year as the central bank tries to stimulate economic growth.

The FTSE 100 index not only has a large number of mining stocks but also boasts a high proportion of international companies and stocks from across Europe. As such, the index often rises along with other European and international exchanges.

So far this year, the FTSE 100 is up 3%, which is ahead of the 1% gain in the U.S. benchmark S&P 500 index.

Is the iShares Core FTSE 100 ETF a Buy?

The iShares Core FTSE 100 ETF has a consensus Hold rating among 200 Wall Street analysts. That rating is based on 150 Buy and 50 Hold recommendations issued in the past three months. The average ISF price target of £2,445.53 implies 195.89% upside from current levels.