FTSE 100 breaks all-time closing high

The pound has fallen to its lowest level since late October as it ends the year on a weak note

Britain's benchmark share index, the FTSE 100, closed at an all-time high on Wednesday (Getty)

Britain’s blue-chip index of the biggest listed companies has hit its new all-time closing high in the first day of trading since the Christmas break.

The FTSE 100 closed 37 points higher at 7106.08, beating the 7103.98 point mark set in April 2015.

The rally was driven by mining companies on hopes of robust US economic growth next year, with BHP Billiton up 3.29 per cent and Anglo American 3.5 per cent higher.

The sharp decline in the value of the pound against the US dollar since the UK voted to leave the EU also helped the FTSE gain ground.

Sterling fell to a two-month low against the dollar on Tuesday, dropping by 0.4 per cent against the US dollar to below $1.23.

The pound is down about 10 per cent against the euro since the EU referendum in June, and is 17 per cent weaker against the US dollar.

The FTSE 100 hit its best ever closing price

The decline in the value of the pound has boosted the FTSE 100 as many companies make a significant proportion of their profits abroad.

This means these companies make more money when sterling is weak.

David Cheetham, market analyst at online trading group XTB, said: “Observers of the markets have for many years noticed a strong propensity for stocks to rise in the period between Christmas and the New Year and this phenomenon appears to be playing out once more.”

Accendo Markets analyst Mike van Dulken noted that London was also being propped up by the commodities sector on the back of rising oil prices.

Oil prices have risen more than 20 per cent since Opec agreed to cut oil production in November.

Chris Beauchamp, the chief market analyst at IG added: “The FTSE 100 is the star performer today, helped on its way higher by an excellent turn from the index’s mining contingent. The sector was one of the really big winners in 2016, making a remarkable comeback over the past twelve months, and it makes sense to think that investors are looking to juice a few more points out of the rally as the year-end approaches.”

The FTSE 100 index also broke its intraday record this October.

The index hit 7,129.21 – up 0.45 per cent or 31.68 points on October 11 as Brexit fears push pound below $1.23.

Additional reporting by agencies