It was a bumper year for stock markets globally and the surprise, perhaps, is that the FTSE 100 index more than kept up. The London market has sometimes been derided as lacking dynamism – the hedge fund manager Paul Marshall called it the “Jurassic Park” of exchanges a few years ago – but its main index enjoyed its best 12 months since 2009. The Footsie didn’t quite make it to the round number of 10,000 but still improved by 21.5%, slightly outperforming the S&P 500 index in the US.
How did that happen amid weakening UK growth, pre-budget chaos and general gloom? The short answer is that a stock market index reflects only its constituent parts. It is not a symbol of national economic virility. That is especially true of the internationally flavoured Footsie, whose members make about three-quarters of their combined revenues overseas.
