FTSE 100 Closes at Record High as Rolls Royce and LSEG Lead Rally

The FTSE 100 closed at a record high on Thursday, lifted by strong gains in Rolls Royce and London Stock Exchange Group as investors continued to favour UK equities amid expectations of further interest rate cuts.

The blue chip index rose 0.4 percent to finish at 10,846.70 points, marking a fresh peak. The mid cap FTSE 250 also gained 0.4 percent, reflecting broader strength across the market. The benchmark index has now climbed around 6 percent in February and is on track for its eighth consecutive monthly rise.

Shares in Rolls Royce surged more than 9 percent after the engineering group reported a sharp rise in annual profits and upgraded its outlook. The company said earnings were boosted by strong demand for aero engines and increased power requirements linked to data centre expansion. The results pushed aerospace and defence stocks higher, with the sector reaching new highs.

London Stock Exchange Group rose nearly 7 percent after announcing a share buyback programme. The move comes as the company faces pressure from activist investors and scrutiny over how artificial intelligence could affect its data and analytics business. Investors appeared to welcome the buyback as a signal of confidence in cash flow and long term strategy.

Market analysts said UK stocks continue to attract buyers partly because of comparatively lower valuations. Despite a strong rally this year, many FTSE 100 companies are still trading on modest price to earnings ratios compared with large US technology firms. Some investors are shifting exposure away from expensive US stocks in favour of established UK names with solid dividend yields.

Expectations that the Bank of England could deliver another interest rate cut in March have also supported sentiment. Lower borrowing costs are seen as beneficial for corporate earnings and consumer spending, although policymakers remain cautious about inflation risks.

Not all companies shared in the gains. Hikma Pharmaceuticals fell sharply after forecasting slower revenue growth, dragging on parts of the healthcare sector. Meanwhile, global technology stocks remained volatile, with ongoing debate over the sustainability of heavy investment in artificial intelligence infrastructure.

The UK market’s performance stands out against more mixed movements in European and US indices. Investors are balancing optimism over corporate earnings with political uncertainty at home and abroad. Domestically, attention remains on the Manchester by election, which is being closely watched as a test of political stability and economic direction.

For now, strong corporate updates and relative value have kept the FTSE 100 on an upward path, reinforcing London’s position as one of the year’s best performing major equity markets.