Global stocks close close to record highs before New Year, dollar and oil dives

A trader works inside a booth on the floor of the New York Stock Exchange (NYSE) in New York City, USA, November 8, 2021. REUTERS / Brendan McDermid

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  • World equities fall, but end the year in fine form after major rally
  • Many markets closed on Friday, trading volume thin
  • Oil prices are falling, but are set for the largest annual increase since 2009

WASHINGTON / LONDON, December 31 (Reuters) – Global stocks traded slightly lower on Thursday as oil prices fell and the US dollar plunged against most major currencies, although it has had its best year since 2015 with a rise of 6 , 7%.

With several markets in Asia and Europe closed on Friday, trading volumes were thin and most markets were directionless.

MSCI World Index (.MIWD00000PUS) fall 0.07 pct. The index rose 17% in 2021, its third consecutive year of double-digit gains.

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Analysts say the U.S. economy has proven resilient to pandemic-related challenges, and many expect the global economy to continue to expand at a pace well above trend.

After first falling in December, world equities recovered during the holiday season as investors became confident that economies could handle the rise in Omicron coronavirus cases and are heading back to record highs.

“As far as COVID is concerned, market participants may so far remain willing to increase their risk exposures and perhaps push stock indices to new heights, as several nations around the world refrained from introducing new lockdowns, despite record high infections around the globe. last few days, “said Charalambos Pissouros, head of research at Cyprus-based brokerage firm JFD Group.

The dollar index fell 0.418% on Friday.

On Wall Street, New Year’s Eve trading ended close to record highs on Friday. Read more

All three major US stock indices achieved monthly, quarterly and annual gains, their largest three-year increase since 1999.

Investors have stuck to the expectations of resilience in the global recovery into 2022 and the prospect of further gains if money remains cheap and corporate profitability high.

This year’s “alt-rally” has seen a wall of cheap central bank liquidity, government stimulus and strong economic recovery out of the pandemic make it hard not to take advantage of soaring asset prices.

U.S. equities have driven the global rally as record-breaking earnings figures from Big Tech companies thrilled investors. This week, the S&P 500 hit another record high.

Commodity prices have also had a strong year, with supply often less than a jump in demand as economies reopened.

On the last day of the year, however, Brent oil futures fell $ 1.75 or 2.2% to $ 77.78 per share.

But both Brent and WTI have risen more than 50% by 2021, spurred by the global economic recovery and producer restraint. Read more

Global oil prices are expected to rise further next year as demand for aviation fuel catches up. Read more

Global asset market performance in 2021

China’s manufacturing activity accelerated unexpectedly in December, but only by a small margin, an official study showed, with analysts predicting more economic headwinds in the short term. Read more

Chinese stocks, one of the few Asian markets opening on Friday, closed higher (.CSI300), (.SSEC), which ended a tough year on the horizon. The blue-chip CSI300 index has lost 5.2% this year, its worst annual performance in three years.

LIRA BACKLESS

The euro, which has fallen 7.4% this year as investors bet the European Central Bank would be slower to end the pandemic’s stimulus than rival central banks, rose 0.1% to hold above $ 1.13.

Japan’s yen, which has lost more than 11% to the dollar in 2021, fell to 115.1 yen per share. dollars, not far from the four-year lows this month.

The pan-European STOXX 600 index (.STOXX) lost 0.19 pct.

The British pound remains down this year against the dollar, but looks set to be the best year since 2014 against the euro. On Friday, it rose to as high as 83.69 pence, the strongest since February 2020.

Elsewhere in the foreign exchange markets, the Turkish lira – by far the biggest currency loser in 2021 – fell for the fifth day in a row.

This week’s fall has eroded the big gains the lira made a week earlier. Investors are worried about the country’s unorthodox monetary policy and rising inflation and fear that President Tayyip Erdogan’s plan to defend lyre deposits, which was unveiled this month, will not work. Read more

Government bond markets were mostly closed.

Spot gold added 0.8% to $ 1,829.04 per share. ounce.

Bitcoin last fell 2.37 percent.

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Reporting by Katanga Johnson in Washington and Tommy Wilkes in London; editing by Jason Neely and Chris Reese

Our standards: Thomson Reuters trust principles.

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