As we head towards the end of another financial year in the UK, it’s time to look back at how the FTSE 100 has fared since our last article back here in September. At that time the US election was yet to happen, and I hinted that the main index would only head higher if the banks joined in.
Well, the banks did join in. Since then Barclays has added 50p to its share price, and Lloyds has gained circa 20%. But in my opinion one of the main catalysts to push the FTSE 100 beyond the 7000 mark was the BP share price heading up from 4.30p ish to over 5.20p a share. BP has pulled back since the middle of January, but certainly Oil was a huge help to the FTSE gaining some much needed momentum.
Mining stocks have also been flying high. Copper prices have been booming, along with most base metals. Stocks such as Rio Tinto (RIO), Fresnillo (FRES) and Anglo American (AAL) have all been very strong since December helping add some strength to the main UK index.
As you can see on the chart below the mining index has been on a solid upward trend for a year now. After being hit hard by falling metal prices for a number of previous years, this is a welcome relief for many mining stocks and related industries. Those companies who streamlined their business during the tough times will now be reaping the rewards of higher values.
The Bank index shows a similar upward trend, which kicked in right after the vote to leave the European Union. Whilst this trend may falter somewhat as trouble looms over triggering Article 50, there should still be plenty headroom for a move higher in late 2017.
So here we are, with the FTSE 100 around all-time highs, the Dow Jones index halfway to 21000, and everything is rosy. Maybe that is the time to be wary? Good times seldom last forever, and while this may not be the “top”, I’d be very surprised if there wasn’t a correction of sorts to shake out some money. Be safe, and be ready.