FTSE Rises Despite Worst Annual Fall for 24 Years

The FTSE 100 saw healthy gains in early trading on Wednesday – the final day of trading before the New Year – and by mid-morning was up 47 points, to 4,440.

Lisa Heald
shareprices.com - Wednesday, December 31, 2008

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Oil, mining and financial stocks led the way as they have done since the start of the week with BP, Shell and Rio Tinto amongst those doing well. The London Stock Exchange is due to close early at 12.30 p.m. on Wednesday so trading is understandably thin. The FTSE 100 has so far fallen 31% since the start of the year, the largest fall since 1984.

Sterling too has fallen more than 27% against the dollar in a year, the sharpest fall since the abolition of the gold standard 37 years ago; a far cry from the 26-year-high of over $2 recorded just over a year ago. Sterling hovered at around €1.02 during quiet trading on Wednesday – approaching parity and close to the new record low of exactly €1.02 during late afternoon trading on Tuesday – and remained on track for its worst annual performance since the creation of the single currency nearly 10 years ago. This news is, of course, no surprise to Forex traders who have seen Sterling repeatedly reach historic lows against the euro in recent weeks as aggressive cuts in the Bank Rate and worries about rising unemployment, public spending, etc., have weakened the currency against a basket of major currencies. On 1 January 2008 Sterling stood at just over €1.35.

 

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