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Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
It’s the final trading day of the year, and what a year it’s been.
It began with the GameStop drama, when retail investors piled into meme stocks and battled hedge funds. It was dominated by the pandemic, with vaccines allowing economies to reopen,…and new Covid-19 variants leading to travel restrictions, lockdowns, and supply chain disruption.
Equity markets rallied, as corporate profits held up. Commodities surged, pushing up firms’ costs.
Central banks continued to stimulate their economies through the year, lifting markets, before persistently high inflation forced some to change tack.
The upshot – Britain’s blue-chip FTSE 100 index has gained over 14% as it recovered its losses early in the pandemic, one of its best peformances in the last 20 years.
Today is a half-day session, so we’ll have the final score by lunchtime.
Frankfurt and Tokyo wrapped things up yesterday, with Germany’s DAX gaining 16% and Japan’s Nikkei up 4.9% to its highest year-end finish since 1989.
Holger Zschaepitz
(@Schuldensuehner)#Germany‘s Dax index ends year w/16% gain, best year since 2019 and almost double the long-term avg performance of 8.5%. And it was a very quiet year for Dax investors. Dax Index’s largest pullback was just over 7%. pic.twitter.com/1YeWJPxShi
Wall Street has had a corker of a year, with the S&P 500 index up around 27%, with mega-tech companies driving gains.
2021 has been an excellent year for equity returns, says Richard Flax, CIO at digital wealth manager Moneyfarm.
The second half of the year has seen a little more volatility than the first half – thanks largely to the Omicron variant causing uncertainty – but the likes of the US, Europe and Japan have seen strong growth.
Butm the situation is a little different for emerging markets and the Asia-Pacific region, Flax adds:
EM recorded negative performance in 2021, with the problems really starting in early summertime.
The primary reason for this dip in performance is China – the two principle issues affecting the largest economy of the bunch are the resurgence of Covid-19 and some disappointing economic growth figures. The Chinese government’s crackdown on large tech companies has also had an impact on the country’s ability to perform economically.
We’ll be tracking the action through the final day of the year, and looking ahead to 2022.
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Read More: FTSE 100 rallies 14.3% in 2021, its best year since 2016 – business live