Market Closes At All-Time High After Santa Rally Boosts Blue-Chip Stocks

Market Closes At All-Time High After Santa Rally Boosts Blue-Chip Stocks
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The London market has closed at an all-time high after the traditional Santa rally boosted blue-chip stocks in the first trading session since the Christmas break.

The FTSE 100 Index rose 37.91 to 7106.08 - breaking above its previous closing high of 7103.98 on April 27 last year - after the mining giants delivered a strong performance.

The new record comes after the top flight hit a new mid-session record of 7129.83 on October 11, boosted in part by the collapse in the value of the pound since the Brexit vote.

Sterling's post-referendum slump has proved a boon for multinational companies listed on the FTSE 100, as many tend to benefit from earnings in currencies that are stronger than the pound.

It means the London market is now 16% higher than on June 24 when it closed down more than 3% to 6138.69 in reaction to Britain's decision to leave the European Union.

Commodities were helped on Wednesday by a further hike in the cost of crude as benchmark Brent lifted 0.6% higher to 56.41 US dollars a barrel.

Mining giants Anglo American and Rio Tinto played their parts in pushing the London market higher after rising 40p to 1,165.5p and 102.5p to 3,166.5 respectively.

However, it was precious metals firm Fresnillo which emerged as the biggest riser on the top flight, soaring 5% or 58p to 1,170p.

David Cheetham, market analyst at online trading group XTB, said: "Observers of the markets have for many years noticed a strong propensity for stocks to rise in the period between Christmas and the New Year and this phenomenon appears to be playing out once more."

On the currency markets, the pound was down 0.3% against the US dollar at 1.222 and 0.3% lower versus the euro at 1.176.

Sterling took a tumble as traders turned their attention to the fast-approaching March deadline for triggering Article 50 and taking Britain out of the European Union.

In UK stocks, airlines and banks missed out on the festive rally, while a profit warning from Bovis Homes saw the housebuilder suffer share losses in the FTSE 250 Index.

British Airways owner International Consolidated Airlines Group (IAG) was down 12.6p to 444.6p, followed close behind by low-cost rival easyJet, off 21p to 1,014p.

Bovis dropped more than 5% in the second tier after the group warned over profits as it said build delays in the run-up to Christmas would hit sales.

Shares were down 45p to 811p, as the builder said it would miss its 2016 sales target due to "slower-than-expected build production" in December, with completions on around 180 homes set to be delayed into early 2017.

The negative sentiment spread across housebuilding stocks, with FTSE 100 firm Persimmon falling 21p to 1,744p and Barratt Developments slipping 4.3p to 465p.

But retailers Sports Direct and online fashion group Boohoo were enjoying gains after unveiling deals.

Sports Direct was 2% higher, or 6.8p to 279.2p, in the FTSE 250 after announcing the £112 million (137.5 million US dollars) sale of its Dunlop brand to Japan's Sumitomo Rubber Industries on Tuesday.

Elsewhere, boohoo.com lifted 3%, or 4.3p to 136.5p, after revealing plans to snap up the brand of collapsed US fashion firm Nasty Gal in a 20 million US dollar (£16 million) deal

The biggest risers on the FTSE 100 Index were Fresnillo up 58p to 1,170p, Randgold Resources up 285p to 6,120p, BHP Billiton up 54p to 1,311.5p, Anglo American up 40p to 1,165.5p.

The biggest fallers on the FTSE 100 Index were Land Securities down 31p to 1,039p, British Land Company down 18.5p to 622.5p, IAG down 12.6p to 444.6p, Royal Bank of Scotland down 5.8p to 225.3p.