Britain’s FTSE ends 2017 on a high

Blue chips, mid caps hit records • Housebuilders have comeback year

• LONDON (Reuters) – The UK’s top share index hit a record on the final trading day of 2017, carried higher by buoyant cyclical stocks.

At the end of a holiday-shortened session, the blue chip FTSE 100 index was up 0.9% at 7,687.77 points, rallying into the close and hitting its highest level on record as shares in miners and financials rose. Mid caps also reached a record high, up 0.4%. 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.

Shares in Rio Tinto, BHP Billiton and Glencore all rose between 1.2% and 2.2%, while precious metals miners Fresnillo and Randgold Resources gained 2.8%and 2.1%, respectively, as the price of gold advanced.

Miners have been among the FTSE’s best-performing stocks this year, with Antofagasta up nearly 49% and Glencore up 41.6% year-to-date.

Elsewhere NMC Health has been the index’s best-performing stock, while a takeover has pushed Worldpay’s shares 57.8% higher this year.

Housebuilders Persimmon and Berkeley Group 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 added pressure.

Last year the FTSE 100 jumped 14.4% as a weak pound boosted the earnings of dollar-earning firms. This year the index is up 7.6%, very slightly underperforming a near-8% 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.

The Bank of Israel on Friday set its representative rate for the British pound at NIS 4.6819.

Utilities have had a tough year, with Centrica the FTSE’s biggest faller, down more than 41% 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 14.7% with miner Kaz Minerals and iron pellet producer Ferrexpo the biggest gainers, up around 150% and 124%, respectively.