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 2019, and what a year it has been! Investors around the world are toasting the best 12 months since the financial crisis, following strong gains in equities around the globe.
The MSCI World Index – a broad gauge of stocks in developed markets across the globe – has surged by around 24% in the last 12 months.
Starting January at 456 points, it is ending December at 564 points, having hit a record high last week.
That beats the 21% gain recorded in 2017, and is the chunkiest move since the recovery from the last financial crisis back in 2009.
The rally has been broad-based — eurozone stocks are up around 20% this year, Japan has gained 18%, while America’s tech-focused Nasdaq is up a sizzling 35% thanks to major players including Apple and Amazon.
We’ve seen record highs on Wall Street, while European stocks touched their highest levels since 2015.
Shares have been lifted by central bankers, who stepped in (again) with easy money to support the markets. US interest rate cuts, and fresh monetary stimulus in the eurozone, lifted asset prices.
Optimism that America’s economy will avoid a recession, and that the US-China trade war will be resolved, also pushed markets higher.
Britain’s FTSE 100, though, has lagged slightly behind this year. It has gained around 12%, with political uncertainty and Brexit worries making UK stocks rather unloved. But it has benefitted from a ‘Boris Bounce’ since this month’s election, which lifted the market for 11 days in a row.
The smaller FTSE 250 index, which contains more domestic stocks, had a good year too. It has gained 25% this year, hitting fresh record highs this month.
Depending how Brexit plays out, some analysts predict London’s market will rally in 2020.
As John Moore, senior investment manager at Brewin Dolphin, puts it:
The ingredients are there for the FTSE 100 to hit a new high. In comparative terms, UK companies look undervalued and the reasons for not owning UK assets are starting to dissipate.
That could precipitate a return to UK equities for investors who previously sold them off. While there has been some volatility and a couple of new index highs, the FTSE 100 is more or less where it was two years ago
London trading ends at lunchtime today, so we’ll have a final reckoning of how the year has played out.
- 12.30pm GMT: London stock market closes early