The FTSE 100 is this morning within touching distance of posting a record high, as the market currently sits less than ten points from its all-time peak. Despite being higher against the US dollar the pound is losing ground elsewhere and is lower against all its other major currencies.
Gold stocks look to recover into year-end
The biggest gainers on the FTSE 100 this morning are shares sensitive to the price of Gold with Fresnillo leading the way and higher by around 2.5%. Randgold Resources is also enjoying a strong up day and rising by just under 2% as the price of Gold bullion increases following the sharp recent declines seen over the past couple of months. Barclays currently sits at the foot of the blue-chip index and has declined by a little over 1.5% so far. There is some notable weakness in financials with Standard Chartered and Lloyds Banking Group also in the red. Mining stocks are falling this morning after Wednesday’s gains with Glencore and BHP Billiton both handing back some of yesterday’s rise. Overall the the FTSE 100 is little changed and lower by 7 points at the time of writing.
London housing market cools
According to Nationwide Building Society the average rise for house prices in London in 2016 underperformed the rest of the UK for the first time in eight years as buyers are increasingly stretched by the affordability given the recent rapid rise. This year has seen a 3.7% increase in home prices in the capital which is a large fall from the 12.2% gain in 2015 and also below the UK-wide figure of 4.5%. As well as the strong recent rally seeing demand dampened, Britain’s vote in June to leave the European Union and an increase in stamp duty have also weighed on London’s property market. Nationwide predict that the UK economy will slow modestly next year, which they believe will likely result in a less robust labour-market and modestly slower house-price growth. Housebuilders have seen no clear reaction in their market value to the news with Barratt Developments slightly lower and Taylor Wimpey rising today.
Indian economy surpasses UK’s
2016 will see the economy of India be larger than the UK’s for the first time in more than 100 years as a combination of Britain’s recent woes and the continued rapid economic growth on the sub-continent both contributing to this historic landmark. A large reason for this is the 20% decline seen in the value of the pound over the course of the last 12 months which means that the UK GDP for 2016 comes in at $2.29 trillion compared to $2.30 trillion for India. This overtaking in economic terms from India has long been predicted given the fast pace of growth seen over the past 25 years, however most thought it wouldn’t be until 2020 that the economy exceeded the size of the UK’s. The Brexit vote and subsequent sharp depreciation of sterling have seemingly accelerated the process.