MARKET REPORT: FTSE 100 slips but is set for best year since 2009

The FTSE 100 is on course for its best year in over a decade despite a sluggish end to trading yesterday.

The blue-chip index closed down 17.68 points, at 7403.01, following a strong rally in recent days.

The Footsie now stands up 14.6 per cent in 2021, putting it on course for its best year since 2009 when it jumped 22 per cent as the market bounced back from the global financial crisis.

However, a further slide in the final trading session of the year today could see it fall short of this milestone. Shares have been boosted as Omicron fears fade, raising hopes the economy can be spared further lockdowns.

Also heading for a strong showing is Marks & Spencer with the High Street stalwart on course for its best performance since 2009.

While the shares dipped 0.7 per cent, or 1.6p, to 233.2p yesterday, the stock has rallied around 71 per cent since the end of last year after two upgrades to its profit guidance raised hopes of a recovery. 

Stock Watch –  Secure Income REIT

Property investor Secure Income REIT hit a three-month high after doing a deal with Legoland owner Merlin Entertainments. 

It will pay £33.5million to extend the leases on Alton Towers, Thorpe Park, Warwick Castle and Heide Park in Germany for 35 years.

The extension means the leases will now last for 55.5 years from 20.5 years previously. 

It also increases the average lease period in the company’s portfolio to 30 years from 19.2 years.

Secure rose 1 per cent, or 4p, to 416p.

It was the opposite story for grocery delivery giant Ocado (up 0.8 per cent, or 12.5p, at 1674p), with which M&S set up a joint venture in 2019, which has seen its share price tumble 27 per cent this year.

Ocado, alongside other online shopping groups, cashed in during 2020 as lockdowns left customers reliant on deliveries.

However, their shares have suffered in 2021 as restrictions have eased and competition resurfaced from its brick-and-mortar rivals.

It is a stark reversal of fortunes for the partner firms, with M&S shares having declined around 27 per cent over the last five years while Ocado has soared 544 per cent.

Housebuilders were lower after analysts at lender Nationwide warned that the booming UK property market was ‘likely’ to cool next year as higher interest rates and the recent surge in house prices weighed on demand.

Robert Gardner, Nationwide’s chief economist, also noted that the stamp duty holiday, which ended in October, ‘encouraged many to bring forward their house purchase to avoid additional tax’, reducing demand pressure.

The assessment came as the price of the average UK home hit a record £254,822 in December, up 10.4 per cent year-on-year, making 2021 the strongest year for house price growth since 2006.

However, the downbeat outlook for 2022 sent shares in Barratt down 0.6 per cent, or 4.2p, to 745p while Taylor Wimpey slipped 0.9 per cent, or 1.55p, to 175.2p, Persimmon inched down 0.8 per cent, or 22p, to 2857p and Berkeley dropped 1.5 per cent, or 75p, to 4824p.

Meanwhile, mid-cap peer Bellway lost 0.8 per cent, or 26p, to 3337p while Crest Nicholson fell 1 per cent, or 3.6p, to 369p and Vistry Group shed 1 per cent, or 12p, to 1188.5p. 

FTSE 250 oiler Harbour Energy announced that it had completed the drilling of its Dunnottar exploration well in the North Sea, to a depth of 15,639 feet.

It found ‘marginal’ amounts of hydrocarbons, the compounds that make up oil and gas, which would be assessed for any commercial potential. The shares were down 1 per cent, or 3.6p, at 350p.

Beauty products maker Creightons lost 0.9 per cent, or 0.8p, to 87p. In the six months to the end of September, pre-tax profit fell to £2.3million from £2.9million a year ago as sales in its hygiene arm tumbled by £11.5million, causing overall sales to slide to £30million from £32.37million.

Elsewhere, Atome Energy, a company focused on the production of environmentally friendly hydrogen and ammonia, got off to a steady start as it debuted on junior market AIM. 

The shares hit an intra-day high of 87.5p, 9.8 per cent higher than their 80p price tag in a £6million fundraising that Atome will use to fund projects. But the stock ended the session flat, at 80p.