Markets

Britain’s FTSE to end 2017 on high on strong mining, health stocks

But uncertainty around Brexit negotiations continues to dog British equities

The London Stock Exchange Group’s offices. Photograph: Simon Dawson/Bloomberg

Fri Dec 29 2017 - 12:21

The UK’s top share index hit a new record on the final trading day of 2017, carried higher by a buoyant mining sector and strength among health stocks.

The blue chip FTSE 100 index was up 0.1 per cent at 7,633.56 points by 0931 GMT, while mid caps gained 0.1 per cent. Friday is a half-day of trading for UK equities.

The FTSE has hit a series of records going into the year-end, helped by its large weighting in commodities-related stocks.

Miners, which are sensitive to the price of underlying metals, have risen as the price of copper has held at four-year highs.

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Shares in Rio Tinto, BHP Billiton and Glencore all rose between 0.5 per cent to 0.7 per cent, while precious metals miners Fresnillo and Randgold Resources gained around 0.5 per cent and 0.8 per cent respectively as the price of gold also advanced.

Miners have been among the FTSE’s best-performing stocks this year, with Antofagasta up 47.4 per cent and Glencore up 40.7 per cent year-to-date.

Elsewhere NMC Health has been the index’s best-performing stock, while a takeover has pushed Worldpay’s shares 57 per cent higher this year.

Housebuilders Persimmon and Berkeley Group have both had a comeback year, recovering after seeing their shares plummet in the immediate aftermath of the UK’s Brexit referendum in June 2016.

“We’ve definitely got an eye on financials, so for us (it’s) housebuilders and financials. Housebuilders for the government policy and financials for rising inflation,” Jasper Reimers, senior analyst at Vertex Capital, said.

Uncertainty around Brexit negotiations continues to dog British equities, while a resurgent pound has curbed the index’s gains more broadly.

Last year the FTSE 100 jumped 14.4 per cent as a weak pound boosted the earnings of dollar-earning firms. This year the index is up 6.9 per cent against a near-8 per cent gain for the pan-European STOXX 600.

“It depends on what happens with the pound. The pound seems to be the big driver in UK economic sentiment at the moment and how the stock market is performing,” said Vertex Capital’s Reimers.

Utilities have had a tough year, with Centrica the FTSE’s biggest faller, down 41 per cent after being hit by a profit warning in November.

BT’s shares have struggled after accounting errors at its Italian business prompted it to cut its 2017 and 2018 outlook earlier in the year.

Mid caps have fared better in 2017, up 14.3 per cent with miner Kaz Minerals and iron pellet producer Ferrexpo the biggest gainers, up around 146 per cent and 124 per cent respectively.

- Reuters

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