Market - - Dec 29,2016
Riding on strong gains for mining companies, FTSE 100 closed at a new record high at 7,106.08 points, breaking its previous high of 7,103.98 on 27 April 2015.
The FTSE 100 (Financial Times Stock Exchange), also called blue-chip stocks, rose by 0.5 percent boosted by the traditional ‘Santa rally’ or the year-end festive season. Randgold and Fresnillo both finished almost 5 percent higher, while BHP Billiton gained 4% to £13.08. British Airways owner IAG dropped by 2.9 percent to 444.1pence, while easyJet fell by 1.7 percent to £10.17. The biggest fallers were British Land and Land Securities, both falling by 3 percent.
Soaring confidence in the US and the impact of the falling pound were the other factors along with a surge in the share prices of mining companies that led to FTSE’s jump of 37 points on the first day after the Christmas break.
UK traders said the rally was majorly a result of rising optimism in the American economy, with data earlier this week showing consumer confidence in the US had hit a 15-year high. Investors are also speculating a surge in the US government spending, as president-elect Donald Trump has pledged to a new $1 trillion fiscal stimulus program once he steps into the White House.
Bigger international firms benefitted from the weakening pound, which has fallen to a two-month low, trading $1.222 against the US dollar.
With just two sessions remaining in this year, the FTSE 100 has now gained 13 percent since the start of 2016, despite a series of massive market shocks including the Brexit referendum result and the US presidential election. The FTSE rise means that the worth of 100 most valuable companies listed in London has jumped by about £230 billion this year.