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The FTSE 100 hit a new record high above 9,000 points during the week, bringing its year-to-date gains close to 10%, even though it later dipped slightly to take it back below that level.
It was an impressive rally considering it was around 8,000 last Christmas. So at 8,992 points as of Friday’s (18 July) close, is it overvalued. Might it even reach 10,000 points in 2025?
With the average price-to-earnings (P/E) ratio of the UK market edging close to 20, I’m cautious. But I’m also optimistic and see bargains out there.
The bigger picture
Macroeconomic factors could have a say in the coming months. On the positive side, inflation continues to ease across major economies, raising hopes that interest rates will soon begin a steady decline. Lower borrowing costs would be a tailwind for most businesses, particularly those reliant on financing like housebuilders and…
