The UK’s premier stock index has marked its most robust annual gain in three years, despite trailing behind its American counterparts. The FTSE 100 achieved a noteworthy 5.7% increase throughout 2024, climbing from 7,733 points to close at 8,173 points on the final trading day of December.
This impressive performance marks the fourth consecutive year of gains for the index, following increases of 14.3% in 2021, 0.9% in 2022, and 3.8% in 2023. The index demonstrated particular strength in early 2024, reaching an unprecedented peak of 8,474 points in May, though momentum waned in the latter half of the year.
Aviation-related stocks emerged as the standout performers, with British Airways parent company IAG and engineering powerhouse Rolls-Royce both securing gains exceeding 90%. The banking sector also showed remarkable resilience, with NatWest shares surging 82%, while packaging specialist DS Smith saw a 77% increase amid acquisition talks with an American competitor.
The FTSE’s performance, whilst positive, was overshadowed by Wall Street’s exceptional year. The S&P 500 recorded a substantial 23% gain, while the technology-heavy Nasdaq Composite soared by approximately 30%. London’s limited exposure to major technology companies has been cited as a key factor in this disparity.
Global market conditions remained volatile throughout the year, with concerns about persistent inflation and potential US Federal Reserve interest rate decisions influencing investor sentiment. The pound sterling experienced mixed fortunes, declining 1.6% against the US dollar while strengthening by more than 4% against the euro.
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