The FTSE 100 has clawed back above 7,000 – how much higher can it go?

The FTSE 100 index has risen to over 7,000 for the first time in over a year – it now sits just above where it was in 1999. But its era of neglect could be coming to an end, says John Stepek. Here's why.

FTSE 100 index
The FTSE 100 hasn't been over 7,000 since before the pandemic hit
(Image credit: ©  Simon Dawson/Bloomberg via Getty Images)

The FTSE 100 breached the 7,000 mark at the end of last week. That's the highest it's been since February 2020. Investors can be forgiven for feeling a little underwhelmed – most other indices have already breached their pre-pandemic highs. But might this be the start of bigger and better things for the UK's headline index?

To say that the FTSE 100 has not been the world's best equity investment is an understatement. It is now a whopping 1%-or-so higher than the 6,930 point that marked its dotcom peak in 1999. At first sight, that means the FTSE 100 has effectively gone nowhere in more than 20 years. Now, it's not quite that bad. The FTSE 100 is one of the world's most income-heavy stock indices. So you shouldn't judge it on capital gains alone.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.