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%, 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% 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% versus the US dollar at 1.366 and was up 0.5% against the euro at 1.113.

In European equities, the CAC 40 in Paris was down 0.1% 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% 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.

British Airways owner IAG closed at the bottom of the FTSE 100 before it revealed its UK-based airline secured a £2 billion loan to help it weather the pandemic.

IAG – which also owns Iberia and Aer Lingus – said the five-year loan facility was underwritten by a syndicate of banks and is partially guaranteed by the Government’s UK Export Finance (UKEF).

Shares in the group were 7.55p lower at 159.8p at the close of play.

The price of oil edged higher following the close of play in London, with the price of a barrel of Brent crude oil increasing by 0.06% to 51.2 US dollars.

The biggest risers on the FTSE 100 were Avast, up 7.5p at 537.5p, Natwest, up 2.1p at 167.65p, Pershing Square, up 30p at 2,565p, and Croda International, up 60p at 6,596p.

The biggest fallers on the FTSE 100 were IAG, down 7.55p at 159.8p, Diageo, down 113p at 2,878p, DCC, down 182p at 5,178p, and Johnson Matthey, down 84p at 2,425p.