Miners in pole position at end of volatile year

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It has been a volatile year for the London markets, which brought euphoria and despair in equal measure, with the miners set to take the plaudits when the dust settles on New Year's Day.

With only two trading days remaining before the end of the year, Rio Tinto, the world's third largest miner, is set to be crowned the top performer in the FTSE 100.

The company initially rose in line with the sector, catapulted up by soaring commodity prices, especially lead, copper, iron ore and coal. The rises were predominantly driven from emerging market demand, above all from China.

Rio stormed up even higher after it was approached by rival BHP Billiton with a $150bn takeover last month, in what would have been one of the largest deals of all time.

At yesterday's close, Rio was up 98 per cent on the year at 5,382p. The next strongest sector performer was BHP, up 69 per cent, followed by Vedanta Resources, up 68 per cent.

The miners dominated the risers this year their weighting helped keep the index in positive territory while oil-related stocks have also looked strong. New entrants Tullow Oil and Cairn Energy have strengthened on rising oil prices and continued talk of consolidation in the industry.

Oil started the year at $61 a barrel, and was at around $97 yesterday. BG Group, another to have been a focus of takeover speculation as well as Chinese stake-building, has been buoyant after solid finds off the coast of Brazil. It is up 65 per cent at 1,142p on the year. Icap is a defensive stock in volatile markets as it makes money from trading no matter which direction the market is going. It is up 51 per cent over the year. Another worth mentioning was the London Stock Exchange, which made it to the top tier in November, and has risen 49 per cent.

The FTSE 100 continued the previous year's rises, peaking in June at 6,754.1, before hitting a wall the following month. The index slumped as low as 5,821.7, smashed by the fallout from rising interest rates, the US sub-prime collapse and the crisis at Northern Rock. It has zigzagged since, but looks like ending the year higher, although with little confidence, at almost 6,500.

It is little surprise that Northern Rock led the markets down, along with the rest of the banking sector. Most top-tier banks have lost nearly a quarter of their value in the past six months as confidence evaporated and some are fearing which is the next to go the way of the Rock.

The beleaguered lender's relegation on Monday has left property stocks at the bottom of the table. The worst, Barratt Developments, also dropped out, leaving the housebuilder Taylor Wimpey at the bottom. Taylor has given up 51 per cent of its value this year.

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