Investors cheer Footsie’s best ever start to a year
THE FTSE 100 notched up its best start to a year as an expected Democratic win in US elections and rising oil prices fuelled a breakneck rally.
The index rose another 229.61 points, or 3.47pc, to close at a tenmonth high of 6841.86, taking gains in the first three days of trading in 2021 to almost 6pc.
That far surpasses the next highest rise of 4.6pc at the start of 2009. Investors bet Democrat victories in the US state of Georgia would lead to more stimulus for the US economy.
By the time markets closed in London, two Democratic nominees were forecast narrowly to have won elections against their Republican counterparts, in a move that would mean the US Senate would be split 50- 50 between the two parties.
Joe Biden’s vice- president Kamala Harris would then have any deciding vote on legislation.
This would give him the ability not just to roll out immediate Covid stimulus measures but also sweeping green infrastructure plans. This prospect helped send industrial metals higher with copper, a key material used in eco technologies, breaking the $8,000 mark for the first time since 2013.
Irish building materials firm CRH was a top riser on hopes that it would stand to cash in on an infrastructure boom. It closed up 7.8pc, or 247p, at 3382p.
London’s oil majors also benefited, with BP rising 6.4pc, or 17.3p, to 289.8p and Royal Dutch Shell climbing 7pc, or 93p, to 1430.6p. The price of a barrel of Brent crude rose by another 0.86pc to $54.06 after the Opec Plus cartel agreed to subdue production and Saudi Arabia volunteered to cut output by 1m barrels a day. Although this was good news for oil companies, it will be bad news for motorists, who are likely to see petrol prices rise in a couple of weeks’ time.
Banking and big mining stocks also made huge gains. HSBC was the top riser, adding 9.9pc, or 37.6p, reaching 416.15p, as Standard Chartered added 9.4pc, or 43.7p, to 509.8p and Barclays 8.3pc, or 11.8p, to 155p.
Elsewhere, delivery group Clipper Logistics said it had seen an unexpectedly busy Christmas as online shopping boomed.
Turnover at its logistics business was up 50pc in November and December compared with the same month last year. Shares rose 2.4pc, or 14p, to 602p.
It was another day, another Hipgnosis acquisition. This time the investment group has snapped up half of the rights to folkrocker Neil Young’s 1,180-strong song catalogue.
It is its third deal this week, after it acquired rights from former Fleetwood Mac guitarist Lindsey Buckingham and producer Jimmy Iovine, who has worked with everyone from Tupac Shakur and Bruce Springsteen to Patti Smith. It fell 0.4pc, or 0.5p, to 122.5p.
Portable power generator group Aggreko rose 4.2pc, or 27p, to 666.5p after it won a revised contract to supply power to the delayed Tokyo Olympic and Paralympic Games this summer.
The new deal is worth around £230m – far more than the £150m the first contract was estimated at. The group powers many of the world’s biggest events and festivals, including Glastonbury.
Auto T rader managed to advance 1.5pc, or 9.2p, to 609.8p despite the new lockdowns meaning car retailers have once again had to shut showrooms.
Sales are, unsurprisingly, expected to fall in January and February. It will make an operating loss of up to £7m by extending free advertising on its site to the end of February. It estimates that between December and February the free ads will rack up operating losses of up to £7m a month.