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Friday, December 30, 2016

FTSE 100 ends 2016 at all-time high of 7142 points – as it happened

London stock market hits its third record high in a row, on the final trading day of the year * Breaking: FTSE 100 ends 2016 at record levels * Blue-chip index has posted its best year since 2013 * Weak pound drove shares up * Analysts predict turbulence in 2017 * Introduction: It’s the final trading day of 2016 3.22pm GMT The City of London has officially shut down for another year. The FTSE 100 has ended a tumultuous year at an all-time high, boosted by a surge in mining companies and dollar earners and hopes of a spending spree by US president-elect Donald Trump. Britain’s blue chip index closed a shortened trading day at 7,142.83, up 22.57 points, beating the previous peak of 7,129.82 set in October. The record came as the index hit a closing high for the third day in a row. Related: FTSE 100 ends 2016 at all-time high after surge in dollar earners 3.07pm GMT Over in Greece, 2016 is closing with the standoff between Athens and its creditors seemingly put to rest...but with no certainty that 2017 will finally resolve the country’s great economic crisis. 2.48pm GMT EUROPEAN STOCK MARKETS ARE ENDING 2016 WITH SOMETHING OF A WHIMPER. The Stoxx 600 index, which tracks the 600 biggest listed companies in Europe, has lost around 1% this year. 2.46pm GMT Another way of looking at things.... The FTSE is up for 2016, but not as much as the pound is down. The FTSE's expected profits are worth less as a claim on global resources. 2.10pm GMT UK SHARE PRICES HAVE ALSO BENEFITTED FROM THE LARGELY ROBUST ECONOMIC DATA SINCE THE BREXIT VOTE ON JUNE 23RD. Britain’s economy grew by 0.6% in July-September, matching the growth rate in the three month’s before the referendum. This refusal to buckle under the uncertainty created by Brexit has encouraged the City to pile into shares. “The latest GDP figures point to a strong UK economy which has probably accounted for some of the pick-up in equity prices overall since the referendum.” 1.39pm GMT I DON’T WANT TO SOUND ALARMIST, BUT THE LAST TIME THE FTSE 100 HIT A RECORD HIGH ON THE LAST DAY OF THE YEAR WAS 1999. That was swiftly followed by the dot-com crash, and a major slump in shares - with the FTSE 100 not recovering its losses until 2015. @KatieAllenGdn @graemewearden @guardian anyone else remember last time ftse100 hit all time highs on last day of year??? Wasn't a pretty Q1 The FTSE 100 closing the year at all-time high.. at the least pension funds will recoup some returns. What does 2017 have for us? With Obama’s foot already out the door, it is clear that he is happy to speak out against the likes of Israel and Russia without fear of dealing with the repercussions. What is not clear is how things will pan out once the pro-Russian Trump comes into power. Should Trump immediately reverse this week’s measures, it would not only say that he places little confidence in his own security services, but also shows that Russia can essentially do what they want without the chance of being reprimanded. US futures have edged off overnight highs..... It looks like a quiet end to a very busy year, but 2017 certainly promises to be just as eventful. 1.27pm GMT The pound and the FTSE 100 have largely moved in opposite directions since Britain voted to leave the EU: The FTSE 100 has ended the year up almost 13% since the referendum - while the pound has slumped by more than 17%. 1.07pm GMT THE PRESS ASSOCIATION also point out that the slump in sterling since the Brexit vote has driven shares up: The pound’s fall, triggered by Britain’s decision to quit the EU, has proved beneficial for multinational companies listed on the index as many tend to benefit from earnings in currencies - such as the US dollar - which are stronger than sterling. On Friday, sterling slumped further against the euro, falling 0.1% to 1.16 euro. The pound was up 0.5% against the dollar at 1.23. I did a 'splainer 1.02pm GMT MINING COMPANIES HAD A GREAT YEAR. Share prices across the sector doubled in 2016, as the prices of commodities such as iron ore, copper and nickel rallied. One of the major reasons for the surging FTSE has been mining firms: Anglo American up 286% this year, BHP up 71%, Rio Tinto 59% 12.58pm GMT THE FTSE 250, WHICH INCLUDES SMALLER UK-FOCUSED COMPANIES, ENDED 2016 UP 3.7% FOR THE YEAR. The FTSE 250 is seen as a better gauge of the UK economy than the international giants that make up the FTSE 100. 12.46pm GMT NEWSFLASH: THE FTSE 100 HAS CLOSED FOR 2016 AT A NEW RECORD HIGH, AFTER SUDDEN LAST-MINUTE RALLY. #Breaking The FTSE 100 Index has closed at a new all-time high of 7,142.83 12.23pm GMT BOOM! THE FTSE 100 JUST HIT A NEW ALL-TIME HIGH. It touched 7132 points, as City traders make one final push before the close of trading. 12.20pm GMT WITH 10 MINUTES TO GO UNTIL THE CLOSING BELL, THE FTSE 100 IS RECOVERING ITS EARLY LOSSES! The blue-chip index is now UP 2 points on the day, at 7122. If it ends over 7121, it will be a new closing high - the third in as many days... 12.14pm GMT THE BOND VIGILANTE TEAM AT M&G RECKON 2017 WILL BE A TESTING TIME FOR EUROPE, AS PUBLIC ANGER ABOUT AUSTERITY BUBBLES AWAY. They write: Nowhere have the subjects of fiscal austerity and rising inequality been as relevant as in Europe today. Stubbornly high unemployment rates combined with declining living standards have contributed to rising levels of civil and political instability over the past year. Populist and nationalist parties have been able to capitalise on this phenomenon and raise massive amounts of support from exasperated European citizens. In Spain, for example, a caretaker government had to be put in place after two consecutive presidential elections failed to designate a clear winner. France will also face an important political test when it holds its presidential election in spring 2017. National Front leader Marine Le Pen will be trying to take advantage of the positive momentum she has built up to sweep her party to its first victory. While this would require a vast – and unlikely – swing from voters, recent events remind us that the rise of anti-establishment parties globally is not one to be underestimated. Equally, traditional polling methods seem to struggle to capture the swing to the hard right that is underway. The extra difficulty for Europe is that its capacity to boost growth and employment via increased public and infrastructure spending and tax cuts is more limited than other economies, for two main reasons. First of all, high levels of debt (Europe has an average debt-to-GDP ratio of 90% versus the 60% target of the Stability and Growth Pact) are forcing most European countries to rein in spending rather than increase it. Second, not having the ability to print money at an individual country level in the European Union (EU) requires each member to demonstrate even more fiscal discipline for the union to remain viable. For those mainstream European political parties wishing to claw back votes from their more extreme rivals, the challenge is therefore as follows: to improve the living standards of hundreds of millions of Europeans, while preserving the EU’s balance sheet. This can only be achieved by implementing the right mix of pro-growth structural reforms, but some tough times could still lie ahead. There are a few hours left in the 2016 work year. Why not have a quick look at our 2017 outlook? 11.39am GMT INVESTORS WILL BE TOASTING THEIR SUCCESSES THIS WEEKEND, OR GRUMBLING BITTERLY ABOUT HAVING BACKED THE WRONG HORSES. London’s stock market wasn’t the best place to put your money this year, despite the FTSE 100’s 13% leap. 11.10am GMT RICHARD STONE, CHIEF EXECUTIVE OF STOCKBROKING FIRM THE SHARE CENTRE, HAS STUCK HIS NECK OUT WITH THREE PREDICTIONS FOR 2017. He reckons that the UK economy will outperform expectations, leading to the first interest rate rise since the financial crisis. Unemployment remains low and employment is at near record levels. The boost from Sterling’s devaluation will continue to feed through – particularly for exporters to the EU who still have unfettered access to the single market but with substantially lower pricing in Euro terms. Inflation will rise, in part as a function of the impact of weaker Sterling, but also as a result of the relatively tight labour market. Without substantial changes in productivity this will likely start to feed through into higher wages. “The level of disaffection in Europe is just as strong as it is elsewhere in the world, but the political and voting systems are very different. This means that those expressions of discontent are less likely to have the same success as they did in the binary choices that were presented by the Brexit and US Presidential Election votes. In particular the coalition nature of politics in the Netherlands and Germany, along with the run-off process for the French Presidential election, mean that although extremist politicians may make advances their ability to gain power is limited – so I would not expect any great surprises. “January will see the inauguration of President Donald Trump and we will then start to see how his policy pronouncements play out. In the US the power of the President is constrained by the checks and balances inherent in the system, particularly in Congress. However, the President still has significant sway on foreign policy and trade. “Relations with China – if the current mood music is to be believed – may become more difficult. This in turn could impact trade. Conversely relations with Russia may soften which might alleviate some of the political tensions currently on the global stage. 10.37am GMT THE FTSE 100’S MERRY UPWARD ROMP HAS BEEN WELCOMED BY EUROSCEPTICS AS A SIGN THAT THE ECONOMY IS IN GOOD SHAPE FOLLOWING JUNE’S REFERENDUM. Conservative MP Michael Gove (who campaigned for Vote Leave, and was rewarded with demotion to the back benches), tweeted last night that the Footsie had hit a record high “despite Brexit”. Despite Brexit my chart of the year 10.11am GMT 2016 HAS BEEN A VINTAGE YEAR FOR THE OIL PRICE. 9.32am GMT 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. Related: Russia plans immediate 'counter-measures' after US ejects 35 diplomats Fresh geopolitical fun and games are taking centre stage with Obama taking a final swipe at Russia before he leaves office. 9.14am GMT 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. Ouch! Shanghai Composite ends the year down 12.3% for 2016 after +9.4% in 2015. 2016 is worst year since 2011. Is the worst over for #China? 9.03am GMT 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. Britain's FTSE 100 set to win this year's race, while Italy's FTSE MIB slumps. The year looks like this. #FTSE #STOXX #equity 8.57am GMT Apologies, I might have forgotten to turn comments on the blog this morning (or they turned themselves off!). Anyway, they’re on now. 8.41am GMT 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. I did a 'splainer 8.35am GMT MINING STOCKS HAVE PLAYED A MAJOR ROLE IN DRIVING THE FTSE 100 UP THIS YEAR. 8.26am GMT 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. 8.09am GMT 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. As ftse gets set to open for its last trading day of the year, all time session highs are a whisker away #markets #brexit FTSE 100 called to open -5pts at 7115 Continue reading...