The UK’s benchmark FTSE 100 index soared to a fresh record high on Thursday, propelled by significant gains in shares of Rolls-Royce and the London Stock Exchange Group (LSEG). Rolls-Royce’s stock jumped sharply after the company upgraded its profit forecast, reflecting robust demand for its aerospace engines and increased power consumption from data centres. Meanwhile, LSEG’s shares climbed following the announcement of a substantial share buyback program, which helped to lift market sentiment amid ongoing investor scrutiny.
Rolls-Royce experienced a remarkable 9.1% increase in its share price after revealing a 40% rise in its annual profits. This impressive growth was largely driven by the aerospace giant’s strong order book and the expanding need for power solutions in the rapidly growing data centre sector. The positive results also sparked a broader rally in British aerospace and defence stocks, pushing the sector to historic highs. This surge highlights the resilience and strategic importance of the UK’s aerospace industry in the global market.
By the end of trading, the FTSE 100 closed 0.4% higher at 10,846.70 points, marking another milestone in its upward trajectory. The mid-cap FTSE 250 index, which focuses more on domestically oriented companies, also saw a 0.4% gain. The FTSE 100 has now climbed approximately 6% during February alone, positioning itself for an eighth consecutive month of gains. This streak outpaces many of its American and European counterparts, as investors increasingly anticipate a potential interest rate cut by the Bank of England in March, which could further stimulate economic activity.
Financial analyst Axel Rudolph from IG emphasized that the FTSE 100’s outperformance appears sustainable. Despite the index’s nearly 22% rise so far in 2025, many constituent companies still trade at relatively modest price-to-earnings ratios, often in the single digits. This valuation makes UK stocks particularly attractive to investors seeking alternatives to the highly valued technology firms in the United States, which have seen their prices soar to elevated levels.
Adding to the market momentum, shares of the London Stock Exchange Group surged 6.7% after the company unveiled a share repurchase plan. This move comes at a time when LSEG faces pressure from activist investor Elliott Management, as well as concerns about how advances in artificial intelligence might disrupt its traditional business model. The announcement was well-received by investors, who viewed it as a sign of confidence from the company’s leadership.
Elsewhere, RELX, a major information and analytics provider, posted a 4.6% increase in its stock price. This rise was part of a broader rebound in global software and data stocks that had been under pressure earlier in the month due to fears surrounding AI-driven disruption. However, not all tech-related stocks shared this optimism. Nvidia, often seen as a bellwether for AI investments, dropped 5% after its strong earnings report failed to assuage investor concerns about the long-term profitability of heavy spending on AI technologies.
On the domestic corporate front, Hikma Pharmaceuticals suffered a sharp decline, with its shares falling 15.8% to their lowest level in over three years. The pharmaceutical company’s disappointing forecast for slower revenue growth weighed heavily on investor sentiment, highlighting the challenges faced by some sectors amid broader economic uncertainties.
Meanwhile, political developments also captured market attention. Prime Minister Keir Starmer confronted a significant electoral challenge on Thursday as voters in Manchester headed to the polls to elect a new lawmaker. The contest is closely contested, with the Labour Party, led by Starmer, facing stiff competition from the populist Reform UK party and the left-leaning Greens. The outcome of this election is being closely watched as a potential indicator of public sentiment ahead of future national polls.
