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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 GMT

The FTSE has rallied by 14.4 per cent this year, adding about £232bn to the value of Britain's top companies (Getty)

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.

What experts have said about Brexit

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1/11What experts have said about Brexit

What experts have said about Brexit

Chancellor of the Exchequer Philip Hammond

The Chancellor claims London can still be a world financial hub despite Brexit “One of Britain’s great strengths is the ability to offer and aggregate all of the services the global financial services industry needs” “This has not changed as a result of the EU referendum and I will do everything I can to ensure the City of London retains its position as the world’s leading international financial centre.”

Reuters

What experts have said about Brexit

Yanis Varoufakis

Greece's former finance minister compared the UK relations with the EU bloc with a well-known song by the Eagles: “You can check out any time you like, as the Hotel California song says, but you can't really leave. The proof is Theresa May has not even dared to trigger Article 50. It's like Harrison Ford going into Indiana Jones' castle and the path behind him fragmenting. You can get in, but getting out is not at all clear”

Getty Images

What experts have said about Brexit

Michael O’Leary

Ryanair boss says UK will be ‘screwed’ by EU in Brexit trade deals: “I have no faith in the politicians in London going on about how ‘the world will want to trade with us’. The world will want to screw you – that's what happens in trade talks,” he said. “They have no interest in giving the UK a deal on trade”

Getty

What experts have said about Brexit

Tim Martin

JD Wetherspoon's chairman has said claims that the UK would see serious economic consequences from a Brexit vote were "lurid" and wrong: “We were told it would be Armageddon from the OECD, from the IMF, David Cameron, the chancellor and President Obama who were predicting locusts in the fields and tidal waves in the North Sea"

PA

What experts have said about Brexit

Mark Carney

Governor of Bank of England is 'serene' about Bank of England's Brexit stance: “I am absolutely serene about the … judgments made both by the MPC and the FPC”

Reuters

What experts have said about Brexit

Christine Lagarde

IMF chief urges quick Brexit to reduce economic uncertainty: “We want to see clarity sooner rather than later because we think that a lack of clarity feeds uncertainty, which itself undermines investment appetites and decision making”

Getty Images

What experts have said about Brexit

Inga Beale

Lloyd’s chief executive says Brexit is a major issue: "Clearly the UK's referendum on its EU membership is a major issue for us to deal with and we are now focusing our attention on having in place the plans that will ensure Lloyd's continues trading across Europe”

EPA

What experts have said about Brexit

Colm Kelleher

President of US bank Morgan Stanley says City of London ‘will suffer’ as result of the EU referendum: “I do believe, and I said prior to the referendum, that the City of London will suffer as result of Brexit. The issue is how much”

What experts have said about Brexit

Richard Branson

Virgin founder believes we've lost a THIRD of our value because of Brexit and cancelled a deal worth 3,000 jobs: We're not any worse than anybody else, but I suspect we've lost a third of our value which is dreadful for people in the workplace.' He continued: "We were about to do a very big deal, we cancelled that deal, that would have involved 3,000 jobs, and that’s happening all over the country"

Getty Images

What experts have said about Brexit

Barack Obama

US President believes Britain was wrong to vote to leave the EU: "It is absolutely true that I believed pre-Brexit vote and continue to believe post-Brexit vote that the world benefited enormously from the United Kingdom's participation in the EU. We are fully supportive of a process that is as little disruptive as possible so that people around the world can continue to benefit from economic growth"

Getty Images

What experts have said about Brexit

Kristin Forbes

American economist and an external member of the Monetary Policy Committee of the Bank of England argues that the economy had been “less stormy than many expected” following the shock referendum result: “For now…the economy is experiencing some chop, but no tsunami. The adverse winds could quickly pick up – and merit a stronger policy response. But recently they have shifted to a more favourable direction”

Getty

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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