FTSE 100 Extends Record Run, Tenth Successive All-Time Closing High

The FTSE drew further support from Sterling weakness on Wednesday with gains in European bourses also supportive, but the index did retreat from its best levels late in the US session.

US equities closed unchanged on Tuesday, while Asian equity markets were generally firmer, which helped provide net support for the UK market.

The FTSE opened little changed and dipped to the 7,260 area in early trading before finding support.
The UK industrial production data was stronger than expected with 2.1% growth in November after the 1.3% decline the previous month. Manufacturing output strengthened, while there was an ending of maintenance in the Buzzard oilfield, which boosted output.

The November trade deficit was wider than expected at £12.2bn from a revised £9.9bn the previous month, although exports showed some evidence of stabilisation.

Sterling came under renewed selling pressure on Wednesday as the dollar gained fresh support against major currencies. The UK currency declined to fresh 3-monh lows below 1.2100, which provided net FTSE support.

Bank of England Governor Carney stated that the UK growth forecasts could be revised higher again and also stated that there were bigger financial-stability risks to the European banks than UK banks from Brexit. Carney also warned, however, that there could be substantial damage to the UK financial services sector and that a transition period was highly desirable.

Oil prices remained under pressure ahead of the US open and there was a brief spike lower after the latest EIA inventories data, which recorded a higher headline build in the latest week and a further big increase in fuel inventories, but crude prices rose sharply, which provided UK market support and the FTSE peaked above 7,320.

US indices moved higher in early trading, but there was a reversal during Trump’s press conference in very choppy trading conditions. The US retreat also pulled the FTSE index sharply away from its highest levels, especially as Sterling recovered some ground.

At the close, the FTSE advanced 15.02 points and 0.21% at 7,290.49, the tenth successive all-time record closing high.

The UK market closed before the Trump press conference concluded and reaction will have a significant impact on Thursday with trends in Sterling also an important market focus.

FTSE 100 Daily Chart

ftse11-01-17

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Tim is a contributing author to EconomicCalendar.com. He is an economist and has been involved in financial markets for over 20 years as an analyst. He specialises in global economic trends, macro policy and central banks. Extensive knowledge, experience and data mining is used to anticipate trends in equities, bonds and forex with a contrarian slant. He is a graduate of the University of York with a degree in Economics/Econometrics.