FTSE 100 on track for best year since 2013 – business live

The year is ending on a subdued note, with the main European stock markets all in the red.

The FTSE 100 is down 20 points from last night’s record close, at 7100 points, in extremely light trading.

And Europe’s Stoxx 600 has dropped 0.15%, meaning it’s on track for its first annual loss since 2011.

The latest deterioration in relations between Washington and Moscow will surely encourage investors to sit on the sidelines today, and see how Vladimir Putin responds to the expulsion of 35 diplomats.

Mike van Dulken of Accendo Markets says:

Fresh geopolitical fun and games are taking centre stage with Obama taking a final swipe at Russia before he leaves office.

Chinese market posts another big loss

China’s stock market has just closed for the year, down 12%.

That’s actually quite a recovery since the wild plunges in early January, which forced regulators to suspend trading altogether a few times.

The other European stock markets have lagged behind the FTSE 100 this year.

Italy’s FTSE MIB has lost 10% during a year dominated by worries over its banks, and a political crisis.

Germany’s DAX gained 6.4% while France’s CAC rose by 4%.

The Europe-wide Stoxx 600 index dropped by 1.6%.

This multicoloured tweet from Reuters’ Atul Prakash shows how each index has performed every year since 2000:

View image on Twitter

(That’s the FTSE 100 on the top, then the Stoxx 600, the Dax, the CAC, and finally the FTSE MIB)

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51m ago08:57

Apologies, I might have forgotten to turn comments on the blog this morning (or they turned themselves off!). Anyway, they’re on now.

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1h ago08:41

We shouldn’t forget that the FTSE 100 has also benefitted from the slump in sterling this year since the Brexit vote.

The Footsie is packed with internationally focused companies; a cheap pound makes UK exports more competitive, and also raises the value of overseas earnings.

So while the FTSE 100 is up 13.8% this year, it’s actually down over 5% when priced in US dollars.

Bloomberg’s Lorcan Roche Kelly wrote the definitive analysis on this issue recently…

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Mining stocks have played a major role in driving the FTSE 100 up this year.

The mining section of the FTSE 100 has jumped by 100% this year, helped by a recovery in commodity prices after a torrid 2015. That’s its best performance since 2009.

Anglo American, for example, has almost quadrupled in value since January 1st.

Miners are benefitting from optimism about the global economy next year, and the prospect of Donald Trump boosting US infrastructure spending.

Best year for the Footsie since 2013

Britain’s FTSE 100 index is on track to post its biggest annual gain in three years.

Despite the political shocks that rocked markets this year, the blue-chip index has gained 13.8% since January 1st. That’s its best performance since 2013, when it gained 14.4%, and follows two years of losses.

It wasn’t plain sailing through. Having begun January at 6,242 points, the Footsie slumped to 5,536 by mid-February, as global markets were spooked by Chinese slowdown fears.

It then recovered, before a wobbly June – the index crashed by 6% after the EU referendum.

But the FTSE 10 soon bounced back and we saw further gains in the summer and autumn. Finally, Trump’s shock election win sparked a late rally, as this chart shows:

The agenda: Can FTSE 100 manage a hattrick?

We’ve nearly made it!

After a turbulent 12 months, there’s just one more trading session to go until we can consign 2016 to history and face the worst that the new year can throw at us.

Given that includes President Trump, the Brexit negotiations, and key elections in France and Germany, we might not want to rush into 2017 too enthusiastically, of course.

But right now, City investors are hoping that the global economy could shrug off these concerns and strengthen next year.

That helped the FTSE 100 to hit closing record highs on Wednesday and Thursday, and there’s a chance we could see a hat-trick today.

The opens aren’t great, though — the blue-chip index has dropped by a few points at the start of trading, having closed at 7120 last night.

The all-time intraday high, incidentally, is 7129 points, so well within reach if City traders get all excitable.

Trading ends at 12.30pm chaps, so get those orders in fast.

[SOURCE:-The Guardian]