The_Guardian_-_2016-12-29

against the US dollar.
With just two sessions to go, the FTSE-100 has now gained 13% since the start of 2016, despite a
series of market shocks including the Brexit referendum result and the US election. That rise means
the worth of the 100 most valuable companies listed in London has jumped by about £230bn this year.
Mining shares have been the star performers in 2016, after suffering major losses in 2015 when
commodity prices crashed. This year, the prices of oil, iron ore, copper, nickel and coal have all
risen, as fears that China would suffer an economic “hard landing” have eased. Trump’s vow to
rebuild America’s highways, schools and airports has also driven up commodity prices.
Anglo’s shares have almost quadrupled in value this year, highlighting how 2016 has been the best
year for mining companies since 2009.
Chris Beauchamp, chief market analyst at IG, says mining firms have made a “remarkable comeback”
over the past 12 months.
“Small losses are the order of the day across most stock markets today, but London’s traders have
evidently come back from Christmas with a festive bounce in their step. The FTSE 100 is the star
performer today, helped on its way higher by an excellent turn from the index’s mining contingent,”
Beauchamp explains.
Energy stocks also gained ground, after the price of oil traded near one-year high.
Mike van Dulken of Accendo Markets said shares were boosted by “gains by oil and optimism
regarding what Trump can do for the economy following his inauguration in a few weeks time.”
David Cheetham, market analyst at online trading group XTB, said shares typically rally in the quiet
period at the end of a year.
“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,” Cheetham said. These increases are known as a “Santa rally” by City workers.
The FTSE 100 is now just 23 points shy of its all-time intraday high, set in October.
The index has gained 12% since the EU referendum in June, despite fears that a vote for Brexit would
derail the economy. However, the FTSE 100 is priced in sterling, which has tumbled by 17% against
the US dollar. This has made Britain’s companies particularly attractive to US investors, helping to
push up share prices.
The FTSE 250 index, which contains medium-sized UK companies, also rose on Wednesday, gaining
0.5%. But it is only up 3% for 2016, substantially lagging the internationally-focused FTSE 100.
Wall Street was unable to follow the City’s lead by setting its own record highs.
The Dow Jones industrial average faltered in morning trading, dropping by 0.4% to 19,863, dashing