UK FTSE 100 Hits Record High on China's 5.3% Growth and U.S.-EU Trade Progress Gains 0.9%

The U.K.’s FTSE 100 reached a record high in July 2025, driven by renewed demand for its export-oriented sectors and optimism over global trade developments. The index closed above 9,070 points amid improved economic signals from China and progress in U.S.-EU trade negotiations, marking a significant rebound after years of underperformance compared to global peers [3].

China’s stabilization as a growth engine has directly supported the FTSE 100’s materials and consumer discretionary sectors. The world’s second-largest economy expanded by 5.3% year-on-year in the first half of 2025, with trade relations between the U.K. and China showing signs of de-escalation after months of diplomatic tensions [1]. This has spurred demand for U.K. commodity producers and manufacturers, which account for a significant portion of the index’s gains. Barclays advised investors to maintain an overweight position in the FTSE 100, citing its exposure to sectors poised to benefit from a steadier Chinese economy [2].

Simultaneously, preliminary agreements in U.S.-EU trade negotiations have reduced tariffs on goods, unlocking billions in cross-border trade and boosting investor sentiment. The FTSE 100 touched an intraday high above 9,070 points on July 23, reflecting optimism about multinational corporations operating in a less protectionist environment. While the index briefly retreated from its peak that day, its 0.44% gain underscored confidence in sectoral resilience [3]. The broader Stoxx Europe 600 and German DAX also rose, though the FTSE 100 outperformed its peers, gaining 0.9% on the same day [4].

The index’s performance reflects structural advantages over other regional benchmarks. Unlike indices heavily exposed to domestic economic cycles, the FTSE 100’s composition of global exporters insulates it from regional downturns. For instance, Reckitt Benckiser’s shares surged 8.6% after the consumer goods company reported higher-than-expected profits, illustrating how multinational firms are capitalizing on improved trade dynamics [5]. The index added 0.6% on July 24 amid renewed trade deal optimism, reinforcing its appeal to investors seeking diversified revenue streams [6].

Structural factors, including foreign capital inflows, have amplified the FTSE 100’s gains. The Bank of England reported that £3.2 billion flowed into U.K. equities in the week leading up to July 23, reflecting a shift in investor preferences toward undervalued assets [7]. However, analysts caution that the index’s momentum depends on the sustainability of China’s recovery and the finalization of trade agreements. Any setbacks in these areas could trigger a reassessment of risk premiums, though current conditions suggest a continuation of the upward trend [7].

Source:

[1] [U.K. FTSE 100's Record High and Its Link to China's Stabilizing Economy](https://www.ainvest.com/news/ftse-100-record-high-link-china-stabilizing-economy-2507/)

[2] [A More Resilient Chinese Economy Means Investors Should Buy Stocks Halfway Across the World, Says One Firm](https://www.morningstar.com/news/marketwatch/20250723111/a-more-resilient-chinese-economy-means-investors-should-buy-stocks-halfway-across-the-world-says-one-firm)

[3] [European Markets on Weds, July 23: Stoxx 600, FTSE Dax Cac](https://www.cnbc.com/2025/07/23/european-markets-on-weds-july-23-stoxx-600-ftse-dax-cac-.html)

[4] [European Shares Set to Open on Cautious Note](https://www.rttnews.com/3557434/european-shares-set-to-open-on-cautious-note.aspx)

[5] [Global Markets Rise as Trade Deal Progress Boosts Investor Optimism](https://www.morningstar.com/news/dow-jones/202507242814/global-markets-rise-as-trade-deal-progress-boosts-investor-optimism)

[6] [The Fed is Listening to Trump but Will Likely Make Him Wait Anyway](https://fortune.com/2025/07/23/despite-insults-fed-listening-trump-but-will-likely-make-him-wait-anyway/)

[7] [2 Reasons The U.K.’s FTSE 100 Is Making All-Time Highs](https://www.forbes.com/sites/digital-assets/2025/07/25/2-reasons-uks-ftse-100-is-making-all-time-highs/)