LONDON MARKETS: U.K. Stocks Rallies And Closes Out 2017 At Record High

By Sara Sjolin, MarketWatchFeaturesDow Jones Newswires

FTSE 100 books 7.6% 2017 gain, about half its gain in 2016

U.K. stocks finished 2017 in style on Friday, with the benchmark index rallying in to the close and scoring a fresh all-time closing high.

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What are markets doing: The FTSE 100 index jumped 0.9% to end at 7,687.77, easily taking out its previous record close of 7,622.88 set on Thursday.

Trading in London ended at 12:30 p.m. on Friday because it's the last trading day before New Year's.

For the full year, the London blue-chip index bagged a 7.6% advance, adding to a 14% jump from 2016. U.K. stocks have in recent years been boosted by pound weakness that came after the country's vote in June 2016 to leave the European Union. A weaker sterling tends to boost the FTSE 100, as about 75% if the index's revenues are made overseas and therefore appear stronger when converted back into the U.K. currency.

The pound rose to $1.3509 on Friday from $1.3442 late in New York on Thursday. Sterling has risen 9.4% against the dollar in 2017.

For 2018, investment banks are cautious on the U.K. stock market, largely due to uncertainty over the country's Brexit deal with the EU. FTSE 100 forecasts for next year range from 7,000 at Société Générale to 8,200 at Citigroup.

We "recommend staying away from the U.K. as Brexit negotiations are accelerating and several scenarios are possible: only a soft Brexit would be supportive for the FTSE 100," strategists at SocGen said in their year-ahead report.

Read:4 reasons Wall Street banks have the hots for Europe in 2018 (http://www.marketwatch.com/story/4-reasons-wall-street-banks-have-the-hots-for-europe-in-2018-2017-12-20)

(http://www.marketwatch.com/story/4-reasons-wall-street-banks-have-the-hots-for-europe-in-2018-2017-12-20)

Bank European stocks Potential upside* U.K.'s FTSE 100 Potential upside*

J.P. Morgan MSCI Europe: 1,720 +6.3% 7,750 +1.7%

Morgan Stanley MSCI Europe: 1,700 +5.1% 7,780 +2.1%

Goldman Sachs Stoxx 600: 420 +7.8% 8,000 +5%

Citigroup Stoxx 600: 460 +18.1% 8,200 +7.6%

Deutsche Bank Stoxx 600: 395 +1.4% 7,500 -1.6%

Société Générale Stoxx 600: 385 -1.2% 7,000 -8.2%

UBS Stoxx 600: 440 +13% 7,900 +3.6%

Bank of America Stoxx 600: 430 +10.4% N/A N/A

Average N/A +7.6% 7,733 +1.4%

* compared with Dec. 28's close

Stock movers: Most FTSE 100 listed stocks ended 2017 on an upbeat note, with shares of NMC Health PLC (NMC.LN) leading advances with an 87% yearly gain.

There was little corporate news on Friday, but miners continued their march higher. The sector has gotten a boost in recent days from a rally in copper that ended at its highest level since February 2014 after 16 straight sessions of gains on Thursday. The metal on Friday, however, took a breather and dropped 1.2%.

Shares of Rio Tinto PLC (RIO) (RIO) (RIO) climbed 2.2%, BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) gained 1.5% and Fresnillo (FRES.LN) put on 2.8%.

Shares of food-delivery company Just Eat PLC (JE.LN) added 2.8%.

The gain came as "investors look to benefit from a week in which takeaway consumption has risen. People, understandably, are rather tired of turkey, and Just Eat is ideally placed to benefit. Having been promoted recently to the premier index, the firm is looking forward to more growth next year," Chris Beauchamp, chief market analyst at IG, in a Friday note.

(END) Dow Jones Newswires

December 29, 2017 08:12 ET (13:12 GMT)