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The FTSE-100 index has reached a second consecutive all-time closing high, marking a significant milestone for the UK’s biggest 100 listed companies. After hitting a new intra-day high of 8,075.52 earlier in the day, the index closed up 20.94 points at 8044.81, a 0.26% increase.

Despite this achievement, the FTSE-100 has been trailing behind its international counterparts this year. While the S&P 500, Nikkei 225, and DAX 40 have seen significant gains, the FTSE-100 has only risen by 4.05%. However, the recent record-breaking closes are noteworthy.

One of the key factors contributing to this success is the weakness of the pound against other currencies. With a significant portion of FTSE-100 companies’ earnings denominated in foreign currencies, a decline in the pound’s value makes these companies’ future earnings more attractive to investors.

Additionally, the FTSE-100 is currently trading at a lower price/earnings ratio compared to other major indices, making it a more affordable option for investors. While the UK’s economic outlook is improving, many companies in the FTSE-100 generate the majority of their earnings from outside the UK.

For a more accurate reflection of the UK economy, investors are advised to look at the FTSE 250, which includes companies with a stronger focus on the domestic market. Despite the FTSE-100’s recent success, the FTSE 250 has only seen a modest 0.6% increase this year, highlighting the nuanced nature of the UK stock market.