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* FTSE 100 index closes 2016 at record high level
* Up 14.4 pct in 2016, outperforms European indexes
* Miners up 102 pct, energy stocks up 50 pct this year
By Atul Prakash
LONDON, Dec 30 Britain's blue-chip FTSE 100
index closed 2016 at a record high level on Friday, with
a blistering rally in mining stocks and a sharp fall in sterling
after June's shock Brexit vote boosting the market.
The benchmark index, dominated by global companies, closed
0.3 percent higher at a life-time peak of 7,142.83 points on
Friday, surpassing the previous record of 7,129.83 set in
October this year. It surged 14.4 percent in 2016, outperforming
major European indexes by a big margin.
The pan-European STOXX Europe 600 index fell around 1.6
percent in 2016, while Italy's benchmark FTSE MIB
slumped about 10 percent. Germany's DAX and France's
CAC were up 6.9 percent and 4.7 percent respectively.
Analysts said a sharp fall in sterling boosted the index's
export-oriented companies, which generate a large portion of
their revenues in dollars. The resilience of the economy also
helped in improving sentiment.
"The latest GDP figures point to a strong UK economy which
has probably accounted for some of the pick-up in equity prices
overall since the referendum," said Yael Selfin, head of
macroeconomics at KPMG UK.
"So far major UK stocks appear to have defied pre-referendum
predictions ... Most market watchers and participants agree this
is thanks to the fall in sterling since 23 June as a number of
the UK's largest companies generate a large portion of their
revenues in dollars," KPMG said.
The FTSE's climb was also due to a strong rally in the
mining sub-index, which jumped 101.5 percent in
2016 on stronger metals prices and expectations that U.S.
President-elect Donald Trump will keep his election pledge to
boost infrastructure spending in the United States.
However, the country's domestically-focused mid-cap index
ended 0.3 percent higher on the day. It recorded a 3.7
percent gain for the year, underperforming the FTSE 100, as
domestic firms did not get the benefit of a weaker currency.
Concerns about higher inflation also hurt sentiment.
Shares in miner Anglo American have surged 287
percent in 2016, followed by a 207 percent jump in miner and
trader Glencore and a 72 percent rise in global
diversified miner BHP Billiton.
Energy stocks also performed well this year following a
recovery in crude oil prices, with the UK oil and gas index
spiking 50 percent in 2016.
The second half of 2016 also saw a sharp rebound in banking
stocks as an improving global economic outlook, a rising U.S.
rate environment and hopes of a lower level of regulation in the
United States after Trump's victory prompted investors to return
to so called cyclical stocks.
The UK banking index surged nearly 40 percent
in the second half, and closed the year up more than 8 percent.
The UK stock market closed by midday on Friday.
(Reporting by Atul Prakash)