The FTSE 100 has posted its best annual gain in five years, despite slipping into the red on the final trading day of 2021.
Despite the downbeat end to the year, the FTSE 100 ends 2021 in a much better place than it began it. The index has risen 14.3% in the last 12 months, marking the best annual gain since 2016 and the third best year in the last decade.
Stocks have benefited from a reopening rebound in the early part of the year that saw company earnings jump in response to the relaxation of Covid-19 restrictions. Momentum slowed as the year went on due to supply chain issues and labour shortages, which hobbled the rebound.
London has also benefitted from a boom in IPO activity. 2021 was the best year for stock market listings since 2007, with almost £50 billion raised by companies going public. 40% of IPOs were in the high growth technology and consumer internet sectors.
Julia Hoggett, CEO of the London Stock Exchange, said: “2021 has demonstrated the strength of the UK capital markets with our most active year since 2007. It has also highlighted the vital role LSEG’s capital markets play in supporting innovation, growth and the transition to a low-carbon economy.”
While the FTSE 100 has risen across the year, gains have lagged indexes on Wall Street. The Dow Jones Industrial Average is on track to rise 17% in 2021, while the tech-heavy Nasdaq is up 22%.