The FTSE 100 has been on a strong run over the past month. It has made fresh all-time highs in the process, and is currently trading at 8,374 points. If it gains another 10% over the course of the next six months, we’ll be above 9,000 points.
To help push this higher, growth shares need to help. Here are two that I feel could contribute to the cause.
Going back to basics
First up is Marks & Spencer (LSE:MKS). The former FTSE 250 stock enjoyed promotion to the main index and is continuing on the rally that helped it get bumped up in the first place. Over the past year the stock is up 62%.
The business has enjoyed a revival following an overhaul over the past few years. In fact, the 2023 annual report was entitled “reshaping M&S”. The firm is now starting to see the fruits of the labour. The £400m worth of cost cutting over the past five years mean that it operates from a leaner and more efficient base.
The focus on omni-channel growth is helping all divisions to outperform. For example, the winter holiday trading update highlighted revenue growth of 10.5% in Food but also 4.8% in Clothing & Home. This shows me that the business isn’t just reliant on one area, but rather the entire group is doing well.
As a risk, continued inflationary pressure does eat into profit margins. This is something that the management team needs to keep a close eye on to ensure that costs don’t get out of hand.
The banking stock you might have forgot
Another growth idea I like is Standard Chartered (LSE:STAN). The global bank sometimes flies under the radar in the FTSE 100 relative to peers, but this doesn’t mean it’s worth discounting.
The stock is up 24% over the past year and recently posted a great set of quarterly results. In an environment where other banks were missing expectations, Standard Chartered beat analyst forecasts for both revenue and net profit.
Importantly, the bank also kept the full-year guidance, which reassured investors. It’s true that this year is an uncertain time for banks, due to the potential for interest rate cuts. Further, with a slowdown in China and places like the UK in and out of a recession, it’s tough to know where to turn.
Yet thanks to the diversification of operations and countries it deals in, Standard Chartered appears to be weathering the storm better than most right now. Of course, it’s a risk that things turn south later this year. Yet for the moment, I think it could continue to outperform and aid the FTSE 100 bid for 9,000 points.
I’m considering adding both stocks to my portfolio when I have some free cash.
