2 FTSE 100 shares I’d buy as the index hits 8,000 points!

I think these FTSE 100 shares could be a steal at current prices. Here’s why I think they could continue rising following a strong start to 2024.

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Investor demand for FTSE 100 shares is surging as confidence returns to the UK stock market. London’s premier share index has moved above 8,000 points for the first time since early 2023 on Tuesday (2 April). It could be on course to print record closing highs later today.

The fragile economic and political backdrop means the recent rally may not be sustainable. But for the time being, hopes of improving conditions from the second half — helped by a likely cutting of global interest rates — are boosting risk sentiment.

I certainly think the following Footsie stocks have further room for share price gains. As well as recording improving trading momentum, these UK stocks also look undervalued despite recent advances. Here’s why I’d buy them if I had spare cash to invest.

Associated British Foods

Today the Associated British Foods (LSE:ABF) share price stands at a four-year high. Yet this blue chip still looks massively cheap to me: it trades on a price-to-earnings growth (PEG) ratio of 0.5. A reminder that any reading below one indicates that a stock is undervalued.

Like some other retail stocks, Primark-owner Associated British Foods has been lifted higher by hopes of improving consumer confidence. But even if conditions remain tough, I think earnings here should continue rising given the firm’s focus on the value end of the market.

Profits should also continue to trek higher as the company’s successful store opening programme rolls on. It opened eight new shops in the 16 weeks to 6 January, with new outlets in the US driving regional sales 45% higher in the period.

Associated British Foods is about more than just retail, though. It is also a major food and ingredients supplier, and is benefitting from a strong recovery in sugar production.

Competition is fierce across the fashion retail segment. But Primark’s strong track of revenues growth is an encouraging sign for potential Associated British Foods investors.

GSK

Pharmaceuticals giant GSK (LSE:GSK) is in the top 20% of best-performing stocks since the start of 2024. But at current prices it still offers attractive all-round value.

As well as trading on a forward price-to-earnings (P/E) ratio of 10.3 times, the medicine maker carries a healthy 3.8% dividend yield.

Investing in drugs companies can be a turbulent ride at times. Setbacks at the R&D stage can be common and massively expensive. Costs can spiral, and product launches delayed or cancelled altogether.

But GSK has an excellent track record on this front, which explains its listing on the FTSE 100. And it has released a flurry of upbeat testing results in the last month alone. This includes positive Phase III news regarding cancer battler Jemperli, and encouraging Phase I results for a Cabotegravir formula at its ViiV Healthcare HIV unit.

With its pipeline also improving, now could be a good time to buy GSK shares. I think earnings here could rise strongly in the coming decades, as population growth and booming emerging markets drive healthcare investment skywards.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Associated British Foods Plc, GSK, and Hargreaves Lansdown Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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