A Christmas Cracker:FTSE 100 Hits Record High
Despite predicted post-Brexit profits of doom, the UK’s benchmark FTSE 100 index today hit a new all-time closing high driven by strong gains in the mining sector.
Despite thin trading, led by a strong performance in the mining sector, the FTSE 100 finished up 37.91 points (0.54%), to close at 7,106, surpassing its previous record high 7,104, which it recorded on April 27th 2015.
The so-called ‘Santa rally’ came as miners such as BHP Billiton (+4.3%) and Anglo American (+3.55) dug deep on the continued expectation of Chinese stimulus, and Trump’s planned infrastructure investment.
Perhaps unsurprisingly given the unprecedented social, political and economic rollercoaster that has been experienced on both sides of the pond in 2016, the FTSE 100 has displayed great volatility this year, crashing to an intraday low of 5,500 in February when oil prices collapsed, before soaring to an intraday high of 7,130 in October; those with the courage to stick with it will have been rewarded with a 13.8% uptick.
The dark days predicted by the previous chancellor may yet be lurking, but despite suffering a sharp fall in the immediate aftermath of June’s EU referendum, the FTSE 100 is 12% higher than its pre-Brexit vote levels.
Multinational companies listed on the FTSE 100, with earnings in currencies stronger than the pound, have benefitted from the post-referendum slump in sterling, and levels of employment show no signs of those accused of pedalling Project Fear.
By contrast, the FTSE Local UK index, which includes companies that generate more than 70% of their revenues domestically, is down 7.1% on the year and 3.7% below its pre-Brexit vote levels.