London stock market hits record high but bitcoin wobbles - as it happened

All the day’s economic and financial news, as shares in London close at a new peak

The smaller FTSE 250 also finished at its highest ever level, partly due to a takeover bid for office manager IWG (which closed 27% higher).

The rally came as new data showed that the world’s 500 richest people had collectively gained $1tn in 2017.

But it was a volatile day for bitcoin. After surging 13% yesterday, the digital currency has fallen back this afternoon.

It’s currently down 4% at $15,094 - having been valued at almost $20,000 10 days ago.

This latest fluctuation came after Israel’s stock market regulator suggested it could ban cryptocurrency firms from listing on the Tel Aviv exchange.

The rally was supported by an upturn in copper and other commodity prices, which helped to lift global mining giants including Fresnillo, Antofagasta and Glencore.

Demand for commodities implies optimism about the outlook for rapidly advancing world economies such as China.

Greg McKenna, chief strategist at AxiTrader, said: “The rally in copper supports expectations that 2018 is going to be a strong year for synchronised global growth.”

The pound is still worth around 10% less than before the EU referendum; that made UK companies more affordable to overseas investors, and pumped up the value of their foreign earnings.

Mining companies and supermarkets helped the index rise on the first trading day since Christmas.

The Conference Board’s measure of consumer confidence, just released, dropped to 122.1 in December, down from November’s 129.5 - which was the highest in 17 years.

Lynn Franco, Director of Economic Indicators at The Conference Board, says:

“The decline in confidence was fueled by a somewhat less optimistic outlook for business and job prospects in the coming months,”

The Dow Jones industrial average rose by 16 points, or 0.07%, with the S&P 500 and the Nasdaq also managed minuscule gains.

The index of the biggest companies listed in London has risen by 22 points, or 0.3%, to 7615 - nudging over the previous intraday record set last Friday.

This means the FTSE 100 has gained around 6.6% this year, lagging behind other indexes such as the US Dow Jones (+25%), Germany’s DAX (+13%) or the Hong Kong Hang Seng (+34%).

Even as millions of kids across the globe were transfixed by Santa trackers on their computers, in the last hour of Christmas Eve, 92 grown-ups were instead glued to the HMRC’s homepage and sent in their tax returns between 23.00 and midnight. On Boxing Day, a further 7,655 returns arrived at HMRC.

HMRC issued the figures as it began its annual plea to the 11m people in Britain who must complete a self-assessment form by January 31. This year it has a new advertising campaign, featuring ducks, of course. The strapline is

Via City AM, here’s a list of the billionaires who gained the most wealth in 2017.

Meanwhile a new poll in Greece has revealed that most citizens are not buying the leftist-led government’s cheery vision of a ‘clean exit’ from international supervision when the country’s latest bailout programme officially ends next year.

In theory, Greeks should be going into the new year on an optimistic note. After seven years of gruelling austerity – the price of three economic adjustment programmes that have kept the debt stricken country afloat – Athens’ latest bailout officially expires in August 2018.

But the excoriating terms attached to financial rescue won’t end there, with the result that most Greeks are not buying government assertions of post-bailout bliss come the summer.

Instead, a poll conducted on behalf of the Real News newspaper by MRB Hellas found that 66.3% of respondents are convinced that international monitoring of Greek finances will continue in some form.

A mere 17% accept the official version: that Greece will make a ‘clean exit,’ weaning itself off borrowed funds by returning to international capital markets. Under that scenario – one vividly expanded by prime minister Alexis Tsipras – Athens will have completed a compliance review in time for the country to build up a cash buffer that would enable it to return to markets and begin debt relief talks by the summer.

The FTSE 250 has gained 59 points to 20,540 this morning, putting it ahead of the previous record high set on 22 December.

Other European markets are lagging, though, with Germany’s DAX down 0.3% and Spain’s IBEX down 0.2%.

Miners are leading the FTSE’s charge higher after Copper traded a fresh three and half year high on Christmas Day, however a significant contribution from Oilers, the index’s largest sector, is aiding the latest foray in record territory.

Continued concern as to the impact of last week’s Catalonian election victory for pro-independence parties, as well as a Euro recovery from its Christmas Day ‘flash crash’, are both weighing on mainland European equities, while US futures are clawing back gains following a negative Boxing day session impacted by an Apple sell-off.

The copper price has hit its highest level in over three years, partly due to optimism that the strengthening global economy will push up demand.

The prospect of supply cuts was also a factor - with China ordering its top producer to halt output for a week to combat winter pollution.

Palladium has hit a 17-year high, at $1,069 per ounce, while gold rose to $1.285 per ounce.

Their $11m investment is probably worth around $1.3bn today - although their precise fortune is obviously as volatile as bitcoin itself.

Craig Erlam of City firm OANDA predicts more wild price moves next year....

Bitcoin is going to continue to fascinate traders heading into the new year and while volatility by its own standards has been tame today, it’s likely to remain very active. Speculators appetite for Bitcoin has been tested in the run up to Christmas, with price having fallen from around $20,000 to not far from half that less than a week later, depending on the exchange.

While prices have since rebounded back to around $15,000, it will be interesting to see whether we see the kind of wild gains that we’ve become accustomed to in the coming months, or whether the recent decline has shaken people’s confidence in the cryptocurrency.

New figures from Bloomberg show that the 500 richest people in the world saw their respective wealth expand by an astonishing 23% during 2017, from $4.4 trillion to over $5.3 trillion.

The report also shows that lesser (!) billionaires also had a vintage year, as the strong gains on the world’s stock markets made the richest even richer (at a time when the average household in the UK was suffering from falling real wages)

This sort of volatility is typical for bitcoin, but maybe the threat of a regulatory clampdown is worrying the market.

 

December 29, 2017

Sources:` Daily Mail ; The Guardian

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