Britain’s benchmark stock index, the FTSE 100, has started 2017 on the front foot, continuing its streak of record highs into a fourth day.
The index closed 2016 with three consecutive record high closes — on December 28, 29, and 30 — and extended that run on Tuesday, gaining 0.5% to close at 7,178 points, another fresh record.
Here’s the chart:
On Friday December 30, the FTSE’s last day of trading before Tuesday, the index broke a new closing and intraday high when it finished at 7,142.3 points. It exceeded both those highs on Tuesday, hitting an intraday record of 7,205.5 just before 9.00 a.m. and a closing high of 7,178
UK stocks are continuing to benefit from the pound’s unprecedented crash against the dollar since the country voted to leave the European Union in June 2016.
The pound’s crash is such a bonus to FTSE 100 companies because of the way the index is made up. It is chocked full of miners, oil firms, and pharmaceutical giants, with 70% of all revenues for companies on the index derived from abroad. Firms like Chile’s Antofagasta, Mexico’s Fresnillo, and Australia’s BHP Billiton use the UK as a base but tend to denominate their assets in dollars.
Eight of the ten top performing stocks on the FTSE 100 in 2016 were either oil or mining companies. The FTSE ended 2016 roughly 14.4% higher than it started, despite the political turmoil that engulfed 2016. That made 2016 the best year in three for the FTSE 100.
Elsewhere in Europe, markets also started 2017 in strong fashion, with the majority of bourses closing higher. Germany’s DAX and Italy’s FTSE MIB were the exceptions. Here’s the scoreboard: