The FTSE 100 bounces back despite Covid to end up 14.3% in 2021 | Stock markets
The FTSE 100 recorded its best year since 2016, as UK stocks recovered from the pandemic shock of 2020.
London’s main blue-chip stock index rose 14.3% in 2021, a year after falling by the same percentage in its worst drop since the 2008 financial crisis. It closed at 7384 points on Friday, after starting the year to 6460 points.
Inventories were boosted over the year by economic optimism as Covid-19 vaccines allowed economies to reopen, with stimulus packages from governments and central banks boosting growth. Investors have largely ignored concerns about inflation, supply chain disruptions, and coronavirus variants such as Omicron.
The more domestically focused FTSE 250 index rose 14.6% from 2021 to end the year at 23,480 points, after hitting a record 24,353 in September. Many other stock markets also rose strongly during the year, with the MSCI World Index of Global Equities gaining 17%.
Ashtead Group, an industrial equipment rental company, was the top performing FTSE 100 share. It rebounded 73%, after its income was boosted by the global economic rebound with the reopening of major projects.
Aerospace group Meggitt jumped 58% after an approach to take over US rival Parker Hannifin. The agreement is being reviewed by the competition authorities. Mining company Glencore rose more than 65%, driven by rebounding commodity prices, while Royal Mail jumped 56% on strong demand for parcel delivery.
Specialty chemicals producer Croda gained 53%, after a record performance notably in the production of ingredients used in Covid-19 vaccines.
Banks and oil companies have also had strong years, but some of last year’s “pandemic winners” have suffered, with Ocado falling 26%. IAG, the parent company of British Airways, fell 10% in 2021 over fears Omicron could delay travel resumption.
London is lagging behind other major European indices, with the French CAC up 20% and the Italian FTSE MIB up 23%. The pan-European Stoxx 600 has set a series of records, driven by tech companies and financial stocks. Luxury also performed well, with shares of LVMH MoÃ«t Hennessy Louis Vuitton firmly established in fashion, up more than 40%.
Japan’s Nikkei 225 ended 2021 at its highest year-end level since 1989, up nearly 5%. It is still around 25% below its peak 32 years ago, before the Japanese stock market bubble burst.
Wall Street led the way, led by big tech companies like Alphabet, which jumped about 66%. The S&P 500 U.S. Equity Index rose 27% during the year, hitting 70 record close highs as corporate profits were inflated by rising consumer spending and cash flowing into corporate funds. actions.
âOverall, 2021 has been a great year for equity returns,â said Richard Flax, chief investment officer at Moneyfarm, digital wealth manager.
âThe second half of the year saw a bit more volatility than the first half – largely thanks to the Omicron variant causing uncertainty – but countries like the United States, Europe and Japan have experienced strong growth. “
Despite this year’s rally, the FTSE 100 is still 6.5% below its high of 7903 points, set in May 2018, while the US, German and French markets all hit record highs this year.
Oil prices rebounded by around 50% in 2021, supported by higher demand and cautious increases in production from the Opec Group and its allies. But gold fell 4% as the prospect of rising interest rates dampened the appeal of non-paying assets.