FTSE slips again in topsy-turvy year
FOR many dealers it was a wasted journey into the City on half-empty trains, just for a half-day session. Skeleton-staffed trading floors watched the Footsie bring the curtain down on a rollercoaster year dominated by collapsing oil and commodity prices.
It fell 31.73 points to 6242.32 on sporadic bouts of profit-taking following the impressive 8pc recovery from August’s low of 5768.22. It ended 2015 just over 5pc lower, which does not appear to be so bad when Brent crude fell 37pc in 2015 to an 11–year low, below $37 a barrel.
The FTSE 250 lost 89.85 to 17429.82 but easily outshone its big brother.
Investors will enter the New Year in an optimistic mood but there is one major cloud on the horizon. When will Mark Carney and his team at the Bank of England raise UK interest rates, which have been on hold at a basement level of 0.5pc since 2009?
Across the Pond, Janet Yellen and the Federal Reserve bit the bullet and lifted US rates for the first time in almost a decade.
Richard Hunter, head of equities at Hargreaves Lansdown, said: ‘A number of things need to happen before sentiment can noticeably improve, such as the stabilisation in commodity prices generally, a clear sustained improvement in company earnings and growth, and a deployment of the capital currently sitting idly by on many corporate balance sheets.
‘Generally, accommodative monetary policy is likely to remain a 2016 theme and, with a selected “bottom-up” approach to investing throughout the next year, there may be no need to run to the hills – even though courage will be needed.’
Mobile giant Vodafone buzzed 3.5p higher to 221p on hopes for a £140bn merger with Liberty Global, which owns Virgin Media.
Miners, who in 2015 have been devastated by the collapse in commodity prices, managed to claw back some gains. Rio Tinto put on 20.5p to 1979.5p, while Glencore gained 0.68p more to 90.48p.
Peroni brewer SABMiller rose 9p to 4069.5p as investors looked forward to its pending marriage with Anheuser Busch InBev.
Despite forever being seen as a break-up bid target, Smiths Group lost 18p to 939.5p.
Arm Holdings eased 7p to 1039p even though it had received a Hargreaves Lansdown 2016 investment recommendation. Revenues are up 30-fold since 1997 and 12bn royalty-earning ARM-based chips were shipped in 2014. Volumes have compounded at 20pc in recent years, and strong licence sales promise further growth in royalties ahead. Because it sells designs, ARM has no need for factories, meaning higher margins and strong cash flow.
Scrappy selling ahead of Thursday’s fourthquarter trading statement left housebuilder Persimmon 11p off at 2027p. Analysts at The Share Centre believe the trading conditions from the first three quarters should follow through to the final quarter. It has benefited from healthy demand for new homes.
As soon as the turkey has been digested, package holiday firms cram TV and radio airwaves with attractive holiday offers.
However, security fears still blight European tourism while a number of airlines are still refusing to fly to Sharm el-Sheikh in Egypt following the suspected bombing of a Russian passenger jet in October. TUI AG nosedived 18p to 1211p.
Allied Minds, the US-focused science and technology group, jumped 10.7p to 400p. Star fund manager Neil Woodford’s Woodford Investment Management Group holds 28pc of the equity.
Still in the doghouse following the recent profits warning, video games retailer Game Digital declined 5p to 121p. Cape came on offer at 235p, down 10p. It recently signed a maintenance contract with BP in Azerbaijan, worth an estimated £61m. Independent Oil & Gas slipped 0.25p to 15p after its Cronx licence was extended by 12 months by the Oil and Gas authority. IOG also received formal confirmation that licence P2085 containing the Truman prospect and the Harvey discovery in the North Sea has been extended by 12 months.
Serabi Gold rose 5pc to 2.75p after major shareholder Fratelli Investments agreed an interim unsecured, short-term working capital convertible loan facility of £3.4m.
URU Metals lost 0.05p to 0.5p after reporting a more-than-doubled first-half loss.
Social housing and home help group Mears rose 19.75p to 468p while disposal news helped Clear Leisure firm 0.28p to 0.88p.
Worries about trading over the Christmas period dragged Card Factory 9.8p lower to 365.2p and Poundland 5.5p to 207.7p.
Talk Talk Telecom, which many believe will find itself on the receiving end of a bid in 2016, buzzed 2.9p higher to 217.4p.
Amid reports of a pending cautious broker note, Genus closed 62p off at 1554p.
÷ DOWN 45p at 4401p with the general trend, Whitbread is a stock to watch in 2016, reckons Hargreaves Lansdown. Analyst Steve Clayton says it has two growth businesses, Premier Inn and Costa Coffee, as well as restaurant brands such as Beefeater. Since 2008 it has almost tripled operating profits, by rolling out brands at home and abroad. It looks to offer predictable growth, with a good track record.
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