Market soars to new peak on hopes of cut in base rates
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.LONDON shares ended the week at a record high driven by foreign demand and persistent speculation that interest rates are set to fall in the new year and so quicken the pace of economic recovery.
The FT-SE 100 Index bounced 25.9 points higher to finish at 3,337.1, capping a strong performance during the week, which left the index 75.8 points higher than last Friday's close.
Share prices traditionally rise in the week leading up to Christmas and next week may be no exception. Market-makers are short of stock and rate-cut expectations may fuel demand from small investors.
But some warn that investors may take profits, and market-makers are anxious to obtain stock at lower prices, although they may have little choice.
The market was also relieved by reports that policymakers at the Federal Reserve, the US central bank, see no need to raise interest rates because they believe that inflationary pressures remain low despite accelerating expansion.
In another indication of a strong fourth quarter in the US, housing starts jumped by 3.9 per cent in November, taking the number of dwellings started to its highest level since February 1990.
Housing starts are a key indicator of US economic activity and have risen for four months in a row, underscoring how low mortgage rates are stimulating a housing recovery. The size of last month's increase took analysts by surprise. Building permits, meanwhile, climbed by 4.8 per cent, which points to demand spilling over into 1994.
The rise in both starts and permits suggests the housing sector will provide a stimulus to the economy well beyond the first quarter. Although a relatively small component of the economy, the housing sector is noted for its potential to affect a wide swathe of activity.
Market Report, page 20
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments