The FTSE 100 index is ready to rally

The FTSE 100 index – made up of unfashionable “old economy” stocks – has lagged other major stockmarkets. But global reflation should see its weaknesses turn into a strength.

On 12 February 2020 the FTSE 100 hit a pre-pandemic peak of 7,534, says Tom Howard in The Times. One year and a “vaccine-fuelled” rally later and it is still more than 12% short of that level. That compares unfavourably with other major stock markets, with the MSCI World index regaining its pre-Covid levels by August.

The key issue for the FTSE is its sectoral composition, says James Coney in the same paper. The FTSE 100 is full of out-of-fashion energy businesses, banks and high street retailers. In this age of frenetic digital innovation, it has just three tech firms that comprise 0.7% of the index. Tech accounts for 30% of America’s S&P 500.

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Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.