Markets: Year ends with final, small, rise

Published on Thursday 31 December 2009 21:14

LONDON FTSE 100 CLOSE 5,412.88 +15.02

GAINS may have been minimal in a subdued half-day trading session yesterday, but the modest upturn helped Britain's benchmark share index to end 2009 on a high note.

The 0.3 per cent rise to just below 5,412.9 meant the FTSE 100 finished the year 22 per cent higher than at the outset of 2009 – the best annual performance since 1997.

Heavyweight banks and miners – two of the main sectors which fuelled the blue-chip recovery for most of the year – made headway again yesterday in a session that closed at 12:30pm, giving plenty of time for traders to prepare for the Hogmanay festivities.

Howard Wheeldon, senior strategist at BGC Partners, described 2009 as "a pretty good year compared with what many of us thought it might be". But he cautioned: "Although 2009 was a year of stock market gains almost across the board, if not exactly at all sector levels, we should not lose sight that a half-decent 22 per cent FTSE 100 gain still leaves long-term investors sitting on a net index loss that is also 22 per cent over the past ten years.

"What a year, what a decade," was Wheeldon's summation.

London's decent performance over the year was still overshadowed by the gains seen in Asian markets, with China's Shanghai Composite Index up almost 80 per cent over the year after falling 65 per cent in 2008. The only underwhelming result came from Tokyo's Nikkei 225, which added a mere 19 per cent.

Miners were responsible for much of London's improvement after dollar weakness drove investors towards commodities over the past year.

The greenback suffered another poor session yesterday with a fall of almost 1 per cent against the pound, although this was distorted by the lack of dealing action.

Among the miners, Kazakhmys shares rose more than 450 per cent over the year, including a gain of 14p to 1,329p in the final session of the year.

In thin London trading, house-building shares were higher after the Nationwide building society said house prices rose 5.9 per cent in 2009 and by 0.4 per cent in December – the eighth straight month of increases.

This was good news for Taylor Wimpey, which rose 0.7p to 38.9p, while rival Persimmon added 12.4p to 469.5p, Bellway lifted 48p to 818p and Barratt Developments improved 3p to 124p, a gain of 2.5 per cent. Shares in the sector have risen sharply in the past year after firms completed debt-restructuring deals and recovered from last year's price slumps. Persimmon delivered the best return for investors after shares doubled on a year ago.

Property firms also benefited from the market's improved sentiment during the closing session of 2009, with Land Securities 28p higher at 685p, Hammerson 16.2p stronger at 424p and British Land up 15.1p at 480p.

Retailers will be watched closely in the coming days, but the forthcoming updates from the sector failed to harm share prices as Next rose 15p to 2,083p, Sainsbury's lifted 4.7p to 323.5p and Tesco added 5p to 428p.

Defensive stocks, such as utility firms, posted the biggest falls of the session, with Centrica down 0.8p at 281.1p, United Utilities off 7.3p at 495.7p and Severn Trent 7p lower at 1,086p.

Among top-flight financial stocks, Standard Life stood out, gaining 7.3p, or 3.5 per cent, at 216.5p. Royal Bank of Scotland nudged 0.12p higher to 29.2p, while Lloyds Banking Group lifted 0.85p to 50.69p.

Wood Group gained 1.6p to 308.8p as it emerged that chairman Sir Ian Wood had transferred some of his shares to the Wood Family Trust, a registered charity, at nil consideration in an off-market deal.