EUROPEAN SCHOLARSHIPS END SLIGHTLY
by Marc Angrand
PARIS (Reuters) – European stock markets opened on Friday, still held back by fears related to the Omicron variant of the coronavirus, ended the last session of 2021 down slightly but, like all major equity markets, they are showing overall double-digit performance against the backdrop of economic recovery and rebounding earnings.
In Paris, where the closing was advanced at 1:05 p.m. GMT, the CAC 40 index fell 0.28% to 7,153.03 points and in London, the FTSE 100 lost 0.25%.
In a context marked both by the absence of a large part of investors and by concerns related to Omicron, the EuroStoxx 50 index fell by 0.18%, the FTSEurofirst 300 by 0.15% and the Stoxx 600 by 0.13%, all in reduced volumes.
The German and Italian markets, among others, are closed for New Year’s Eve.
On Wall Street, major US index futures are showing an opening down 0.17% for the Dow Jones, 0.14% for the Standard & Poor’s 500 and 0.1% for the Nasdaq.
All evolve close to the records recorded in recent weeks (Thursday for the S & P-500, Wednesday for the CAC 40, mid-November for the Stoxx 600) and record over the whole year one of the best performances of the 20 recent years: the S & P-500 is trending towards a gain of over 27%, the Stoxx 600 has risen by 22.5% and the CAC 40 has gained 28.9%, its biggest annual increase since 1999.
The London FTSE is a little behind with an increase of 14.3%.
The 2021 bullish move has benefited almost the entire market, advances in COVID-19 vaccination, the maintenance of ultra-accommodative monetary policies by most central banks, and massive stimulus packages in the United States , in the European Union and in Japan having reinforced investor confidence in the rebound in growth and the recovery in results of listed companies.
This optimism was however tempered by concerns related to inflation and then to the Omicron variant which in recent weeks has led many countries to tighten health restrictions.
Among the latest economic news of the year, the official Chinese manufacturing PMI index shows an unexpected acceleration in activity growth in December.
VALUES IN EUROPE
Over 2021 as a whole, the best sector performances in Europe are for banks (+ 34.3%) and for technology stocks (+ 33.8%), while the transport and leisure sector, still handicapped by pandemic, must be satisfied with a gain of 4.1%.
“The rescue plans linked to the pandemic have enabled European banks to absorb the shock caused by the contraction in economic activity at the start of the year”, explains Charalambos Pissouros, director of research at JFD Group.
“And as (European Central Bank) President Lagarde says interest rates are unlikely to rise again in 2022, European banks should continue to profit.”
RATE
Benchmark bond yields are down slightly in both the United States and Europe, to 1.5049% for ten-year US Treasuries and -0.179% for the German Bund of the same maturity.
The ten-year-old Italy, meanwhile, posted a new high of almost two months at 1.192%, with investors remaining concerned about the possibility that the President of the Council, Mario Draghi, will run for the Presidency of the Republic in the weeks to come, which would open a new period of political uncertainty in Rome.
CHANGES
On the currency side, the spreads are very small and the volumes very low. The dollar is practically unchanged against the other major currencies (+ 0.00%) and the euro is trading at 1.1321 dollars.
The single European currency shows in 2021 a decline of just over 7% against the greenback, its worst performance since 2015, a consequence of the gap between the timetables for tightening the monetary policy of the ECB and the Federal Reserve.
The “dollar index”, which measures the fluctuations of the American currency against a benchmark basket, gained 6.7% over the year.
OIL
The oil market is trending downward, but this decline does not prevent it from posting its best performance for 12 years, thanks to the recovery in demand and OPEC + ‘s supply management policies.
Brent dropped 1.47% to 78.36 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.71% to 75.67 dollars.
They are nevertheless heading for annual gains of over 51% and 56% respectively, unheard of since 2009.
(Written by Marc Angrand, with Anisha Sircar in Bangalore, edited by Matthieu Protard)