The FTSE 100 just rocketed to a record high

Emma Haslett
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Stocks rocketed in afternoon trading (Source: Getty)

The FTSE 100 finished at a record high after a turbulent day in politics pushed the pound lower.

Britain's bluechip index edged 0.3 per cent higher in afternoon trading to close at 7,556.24 points, with energy stocks and wealth managers St James's Place and Hargreaves Lansdown leading the risers.

However, most of the index's jump was driven by the devaluation of sterling, which tumbled as much as 0.5 per cent against both the dollar and the euro in afternoon trading after Brexit negotiators on both sides admitted to a deadlock.

The pound began to slide after Michel Barnier, the European Union's chief Brexit negotiator, said although the second phase of Brexit talks is "within our grasp", the two sides had reached an impasse.

However, sterling recovered some of its mojo later in the day, to hit €1.124 against the euro as the equities markets closed, 0.2 per cent down, while it finished 0.4 per cent down against the dollar, at $1.3171.

Meanwhile, energy stocks were pushed higher after it emerged a proposed price cap will only run until 2020.

But despite the good news Laith Khalaf, senior analyst at Hargreaves Lansdown, advised caution.

"The question is whether the market’s strong run means it’s fit to burst. To that end, it’s vital to recognise that the level of the FTSE is not a measure of the value in UK stocks, seeing as it doesn’t take account of the level of earnings of companies in the index," he said.

"Basing investment decisions on the level of the FTSE is therefore like deciding whether to buy something based on its price, without actually knowing what the item is.

"Factoring in earnings, from where we’re sitting valuations in the UK stock market look reasonable, neither particularly cheap, nor particularly expensive. That means in the short term the stock market can turn in either direction without defying the laws of statistics."

Read more: Celebrating the silver anniversary of the FTSE 250

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