It has seven months since the United Kingdom shocked the whole world with its controversial decision to leave the European Union. The June 23 referendum has created a swirl to the global market where investors doubted the resilience of the UK economy along with its currency, the British pound, and its main benchmark, the FTSE 100 index.
Last year was plagued with volatility and uncertainty, with major political upheaval storming the markets. In the wake of the hotly-debated Brexit vote, how is London’s blue chip index doing so far?
Thriving and Surviving
Initially, the benchmark reacted negatively to the referendum. Hours after the vote, the FTSE 100 futures plummeted 8.7 per cent as an immediate aftermath of leaving the continental bloc.
The pound was also severely hurt as it touched its lowest peak for more than 30 years. But this major turnaround of the currency has helped the benchmark on its journey to a modest recovery. A weaker pound has been beneficial to the blue chip index, helping the companies in the index staged a huge comeback.
The backlash caused by the June-23 vote was short-lived and the FTSE 100 index proved that it can thrive and survive in uncertainty-laden era. The index has shrugged off the doubts over its resilience and has come back above the 6500-mark by July 1 and ten days later, when Theresa May took over the position vacated by David Cameron, it has settled into bull market territory and jumped sharply 20%.
By December, UK bourse was already trading more than 12% higher than its pre-Brexit levels and on the 30th of the month, it has surged to its all-time high of 7 142.83 on a 14% advancement.
The foundation has been laid. Can the index sustain its life in the Brexit-era?