UK’s FTSE 100 gains for third year, but lags global peers

By Khushi Singh and Shubham Batra

(Reuters) – Britain’s FTSE 100 advanced on Friday, led by personal goods and auto stocks, with the index heading for its third annual gain bolstered by bets of early rate cuts next year by global central banks.

The blue-chip FTSE 100 edged 0.1% higher to log its fifth weekly gain and best month since January. The benchmark index, however, lagged its global peers with a 3.8% gain for the year.

The S&P 500 has risen 25% so far this year, while Germany’s DAX closed the year with gains of more than 20%.

“Britain’s blue-chip index still appears unloved with attention grabbed by the bright lights of Wall Street and the tech heavy makeup of New York’s exchanges, with a frenzy for all things AI fuelling buying behaviour,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

The FTSE 250 mid-cap index was down 0.2%, but gained for a fourth consecutive week. It had its best quarter in the current year and its best month in three years.

Both the indexes marked their longest-running weekly rising streak since early April.

The personal goods sector climbed 0.9%, hitting a two-week high and heavyweight oil and gas added 0.7% on higher oil prices. [O/R]

Shares of real estate and real estate investment trusts were the top losers, falling 1.1% each.

Data showed British house prices dropped more than expected in the year but a fall in mortgage rates in recent weeks has led to signs that the market might have bottomed out.

Although battling one of the stickiest inflation trends through the year and almost slipping into a recession by the end of it, British equities were resilient, logging in yearly gains.

During the year, the aerospace and defence sector led gains, soaring over 67%.

In company news, iron ore pellet producer Ferrexpo shares fell 0.2% after gaining slightly during the session as the company posted an end-of-year report.

The UK markets will be closed on January 1, on account of the New Year’s holiday.

(Reporting by Khushi Singh, Shubham Batra and Bansari Mayur Kamdar in Bengaluru; Editing by Sohini Goswami, Janane Venkatraman and Sharon Singleton)