FTSE 100 record closing high: £232bn added to value of top companies in 2016

 The index, dominated by global firms, has been boosted by a sharp drop in sterling after the referendum 

Zlata Rodionova
Friday 30 December 2016 13:22
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The FTSE has rallied by 14.4 per cent this year, adding about £232bn to the value of Britain's top companies
The FTSE has rallied by 14.4 per cent this year, adding about £232bn to the value of Britain's top companies

Britain’s blue chip FTSE 100 set a new record on the last day of trading of 2016 after climbing to record closing highs for two consecutive days.

The blue-chip index gained 22 points or 0.3 per cent, to finish at 7142 points on Friday, its third closing high in as many days and a new intraday high.

This means the FTSE has rallied by 14.4 per cent this year, adding about £232bn to the value of Britain's top companies and making it one of the best-performing European market, in spite of the political turbulence caused by the Brexit vote and Donald Trump’s election victory.

However, it is important to remember that the index is priced in sterling, which means it is still down around 5 per cent in US dollar terms over the year.

How the pound has struggled since Brexit

The index, dominated by global firms, has been boosted by a sharp slump in the value of the pound after the referendum.

Sterling slumped further on Friday, falling 0.1 per cent to €1.16 euro. The pound was up by just 0.5 per cent against the dollar at $1.23.

The pound is down about 11 per cent against the euro since the EU referendum in June, and is 18 per cent weaker against the US dollar.

Analysts said that the FTSE's climb was also due to a strong rally in the mining sub-index, which has jumped 100 per cent in 2016 on stronger metals prices and expectations that US President-elect Donald Trump will keep his election pledge to boost infrastructure spending in the United States.

Shares in miner Anglo American have surged 285 per cent in 2016, followed by a 205 per cent jump in miner and trader Glencore and a 71 per cent rise in global diversified miner BHP Billiton.

The FTSE 250 or the 250 biggest companies in the UK, ended 2016 up 3.7 per cent for the year.

The index is more dependent on the UK economy than the multinational companies represented in the FTSE 100.

Additional reporting by agencies

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