FTSE 100 records worst year since 2008 financial crisis

THE FTSE 100 tumbled lower on the back of a strong pound on the last trading day, as London’s leading index suffered its worst year since the 2008 financial crisis.

The index once again lagged behind its international peers as currency pressures and soaring coronavirus case numbers weighed on sentiment.

London’s top flight closed 95.3p, or 1.4 per cent, lower at 6,460.52p at the close of play on New Year’s Eve.

This takes its total losses for 2020 to a 14.34 per cent annual slump.

Although the index finished significantly higher than its lowest ebb in March, it remained significantly below January levels.

Joshua Mahony, senior market analyst at IG, said: “The FTSE 100 closed out the year on the back foot, with the value and cyclical nature of the UK markets ensuring significant underperformance compared with their US counterparts.

“That underperformance of UK stocks is never more apparent than seeing the Dow reach record highs in the same week as the FTSE 100 could secure its worst annual performance since 2008.’’

He added that travel and housing stock were at the forefront of Thursday losses, with “worries over an extended period of economic restrictions heightening the clear uncertainty of exactly how hard the UK economy will suffer on its exit from the EU’’.

On Thursday, sterling continued its recent gains against the weak US dollar after the Brexit Bill passed through Parliament on Wednesday.

The pound increased by 0.25 per cent versus the US dollar at 1.366 and was up 0.5 per cent against the euro at 1.113.

In European equities, the CAC 40 in Paris was down 0.1 per cent in late trade while the German Dax was closed for the day.

Across the Atlantic, the Dow Jones and S&P were both broadly flat as they ended the year with a muted trading session.

In company news, Countrywide jumped in value after the troubled estate agency agreed to a takeover by rival Connells in a deal valuing the group at more than £134 million.

Shares in Countrywide surged 12.8 per cent higher on news of the deal, which will create an estate agency with more than 1,200 branches and about 15,800 staff across the UK. It closed up 44.2p at 390.6p.