Stock markets mostly retreated yesterday in shortened end-of-year sessions, but rose sharply overall in 2019 thanks to late surges on receding recession fears and easing China-US trade war tensions.
London’s benchmark FTSE 100 index closed down 0.6% at 7,542.44 points from the previous session — but jumped 12.1% in 2019 as it bounced back from a 12.5% slump a year earlier.
In the eurozone, the Paris CAC 40 index ended 0.1% lower at 5,978.06 points, yet soared by more than a quarter over the year.
Frankfurt’s DAX 30 finished its year on Monday with an annual gain of 25.5%, also following a sharp loss in 2018.
MSCI’s global share index was treading water but is on track for a 24% rise in 2019 — the index’s best performance in almost a decade.
The pound finished a volatile year with gains yesterday against the dollar and euro.
“It has been a year for rallies in equities,” said Chris Beauchamp, chief market analyst at IG trading group.
“We endured plenty of Brexit and trade war headlines in 2019, but these will go with us into next year, ensuring more volatility for traders and investors.”
Asian stock markets also closed mainly lower yesterday, following a subdued lead overnight from the US where investors took profits after Wall Street’s recent record highs.
Hong Kong ended a half-day of trading almost 0.5% down, although the bourse rallied more than 7% in December.
Tokyo was shut for a public holiday.
“While market volumes are predictably light, investors continue to strike a year-end cautionary tone as December optimism is gradually giving way to 2020’s uncertainty,” Stephen Innes, chief Asia market strategist at AxiTrader, said in a client note.
Asian investors were also watching for key policy announcements early in the New Year.
North Korean leader Kim Jong-un is set to give his New Year’s speech today, with all eyes on nuclear-armed Pyongyang’s threat of a “new way” after its end-of-year deadline for sanctions relief from the US, analysts said.
An address by China’s Xi Jinping will be followed closely by the markets as well.
On Monday, media reports said the US and China would shortly sign a partial trade deal, with White House economic aide Peter Navarro telling Fox News the signing could occur “within a week or two”.
“The P1 (phase one) deal is still ‘skinny’ relative to a full trade de-escalation scenario,” cautioned AxiTrader’s Innes.
“Investors will then press to consider the P2 risks, after all — how much more progress can be realistically expected ahead of the US elections next year?”
Elsewhere yesterday, oil prices slid despite reports Iran had seized a vessel suspected of smuggling fuel near the Strait of Hormuz — a chokepoint for a third of the world’s seaborne oil.
Traders were also waiting for the release of US crude production data yesterday.
Over the year, the price of Brent North Sea crude jumped by almost one quarter and New York benchmark contract WTI soared more than one third in value, helped by a tighter supply situation.
China mainland stocks gained 0.4% after data showed manufacturing activity in the world’s second largest economy expanded for a second straight month in December.
The data added too optimism that trade tensions were easing between Beijing and Washington after White House trade adviser Peter Navarro said on Monday a Phase 1 deal would likely be signed in the next week.
He cited a report that Chinese Vice Premier Liu He would visit the United States this week.
“This is the second print above 50 since the PMI dropped into contraction in May this year and could be early tentative signs of stabilisation of the sector,” MUFG’s Lee Hardman wrote in a note to clients.
“It is worth remembering however that the Phase One trade deal (which has not even been officially signed) has only recently become a more certain prospect and that it may still take some time for a rekindling of sentiment and investment to be reflected in the economic data.”
China’s gains built on Monday’s rally, which was driven by a combination of strong retail sales growth and hopes that a new benchmark for floating-rate loans could lower borrowing costs.
Following losses on Wall Street on Monday, US stock futures showed some optimism ahead of the final session of the year, with S&P 500 e-minis up 0.1%. In currency markets, the dollar index, which tracks the greenback against a basket of six major rivals, slipped 0.2% in its fourth straight session in the red.
The dollar continued to weaken against the yen for a third straight session, dropping 0.2% to 108.65 and hitting its lowest level since December 12.
The euro strengthened 0.06% to buy $1.1204.
from Gulf Times https://ift.tt/2MLQn7c
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