FTSE 100 set to drop five per cent over the year on mining, oil and banking stocks

 
James Nickerson
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Christmas is unlikely to be merry for investors (Source: Getty)

The FTSE 100 is set to end the year lower than it started thanks to disappointing performances in the mining, oil and gas and banking sectors - after it reached highs in excess of the 7,000-point mark in March, April and May.

The index hovered around 6,250 points in early trading, up 0.1 per cent, having closed 2.5 per cent higher yesterday evening.

But it is expected to finish today lower than it opened in January, at 6,566 points - meaning it could enter the final trading days of the year as much as five per cent lower than it started.

"The sharp declines in metals prices to multi year lows have seen the market capitalisation of [miners] drop sharply, with the shares of Glencore and Anglo American down over 70 per cent, as slowing demand and a strong US dollar weigh on sentiment," said Michael Hewson, chief market analyst at CMC Markets.

Read more: Oil prices rise as US stockpiles drop less than expected

This morning Anglo American and BHP Billiton continued to lead the pack, up 1.33 per cent to 327.33p per share and 1.05 per cent to 787p per share respectively.

Banking stocks also continued to weigh, with Standard Chartered among the worst, thanks to a slowdown in China and Asia.

Read more: FTSE 100 makes strong gains on the back of commodities

"Six years on after being bailed out Royal Bank of Scotland’s fortunes still remain no nearer to becoming clearer, with another disappointing year", Hewson added.

But housebuilders all performed well over the year, including Taylor Wimpey, Berkeley Group and Persimmon all making gains in excess of 25 per cent, which is expected to continue into the new year, given the government's commitment to build more homes.

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