FTSE 100 hits new high as miners and energy stocks power ahead

UK equities extend gains above 10,000 points

​The FTSE 100 climbed around 0.5% at the open, pushing the index firmly above the 10,000-point threshold for the first time this year. Mining stocks, oil majors and banks provided the bulk of the momentum, helping UK equities outperform their European counterparts.

​Record copper prices and firm precious metals supported the mining sector, with the rally in industrial commodities providing a tailwind for resource-heavy names. BP and Shell both added to the index's advance, benefiting from a brief spike in crude prices following geopolitical developments.

​The FTSE 250 also edged higher, with gains in WPP, Man Group and Ocado pointing to broader appetite for risk across UK equities. The mid-cap index has found support in recent sessions despite concerns about the domestic economic outlook.

​However, the rally contrasts sharply with weakness in European tech stocks, which struggled as investors rotated back into more defensive sectors. This divergence highlights the FTSE 100's heavy weighting towards energy, materials and financials rather than growth-oriented technology names.

​Retailers outperform despite inflation pressures

​NEXT provided a boost to retail sentiment after raising profit guidance for the fifth time this financial year. The fashion retailer reported that December full-price sales beat expectations, prompting management to upgrade forecasts despite warning of tougher year-on-year (YoY) comparatives in the first half.

​The strong trading update came as UK food inflation rose to 3.3% in December from 3% previously, keeping cost-of-living pressures firmly in focus. Higher grocery prices continue to squeeze household budgets, creating an uncertain backdrop for consumer-facing businesses.

​The Bank of England (BoE) will be watching inflation data closely as it weighs up the pace of future interest rate cuts. Sticky food price inflation complicates the path to the 2% target, potentially limiting room for aggressive monetary easing this year.

​Sterling remained broadly stable, holding around $1.35 to $1.36 against the US dollar and flat versus the euro. Gilt yields edged higher across the curve, reflecting modest pressure on UK government borrowing costs as investors digest the inflation picture.

​Asian markets hit record highs on momentum flows

​Asia-Pacific equities extended their rally, with MSCI's regional indices climbing to all-time peaks. Japan's Topix jumped 1.6%, while Taiwan's Taiex and South Korea's KOSPI both printed fresh record highs, driven by AI-related investment flows and broad-based risk appetite.

​The momentum in Asian stocks came despite the US intervention in Venezuela, which markets largely ignored. Investors appeared more focused on equity trends and technology sector strength rather than geopolitical developments in Latin America.

​European equity futures pointed modestly higher following the record closes, while S&P 500 futures added around 0.1%. Energy and financial stocks provided much of the support, offsetting lingering concerns about lofty valuations in the technology sector.

​Commodities rally on supply disruption fears

​Gold rose 0.4% to around $4,466.00 an ounce, sitting within $100.00 of its record high as investors sought haven assets. Silver and  platinum both jumped around 2.6%, while copper hit fresh record highs on fears of potential supply disruptions.

​Crude oil drifted lower after an initial $1-a-barrel spike on Monday, as traders assessed the limited near-term impact of Venezuela on global supply. Brent crude settled around $61.60, with WTI near $58.10, as the market digested geopolitical developments.

​Dollar weakens ahead of key US jobs data

​The dollar edged lower against the euro and sterling after a sharp round-trip on Monday, with focus turning to Friday's US employment report. The upcoming jobs data will provide crucial insight into labour market conditions and potential Federal Reserve (Fed) policy moves.

​Expectations for Fed easing have supported risk assets in recent weeks, with investors pricing in multiple rate cuts this year. However, any sign of persistent wage growth or labour market tightness could prompt a reassessment of these assumptions.

​Currency markets remained relatively calm ahead of the data release, with traders reluctant to take large positions before the key economic release. The dollar's recent softness has provided support for commodities priced in the US currency, including gold and industrial metals.