Alexa

World stocks ending the year on a whimper

World stocks ending the year on a whimper

Global stocks mostly fell Friday on the final day of the year as investors looked to lock in any recent gains to smarten up the look of their 2010 portfolios.
Year-end trading is often complicated by traders closing out positions to present their portfolios in as good a light as possible. After all, bonuses are often dependent on how well those portfolios have actually performed.
In Europe, the FTSE 100 index of leading British shares was down 37.45 points, or 0.6 percent, at 5,933.56 while the CAC-40 in France fell 27.46 points, or 0.7 percent, to 3,823.30. Both markets are only open for half the day, while Germany's DAX is closed, having ended the year Thursday around 16 percent higher at 6,914.19.
Wall Street was poised for another modest retreat at the open _ Dow futures were down 10 points at 11,512 while the broader Standard & Poor's 500 futures fell just over a point to 1,253.40. If they end up flat, then the Dow and the S&P will end the year up around 11 percent and 13 percent respectively.
Many of the world's leading stock markets will end the year up higher as the global economy has recovered over the past 12 months from its worst recession since World War II and a number of central banks, including the U.S. Federal Reserve, have continued to pump in more money into the financial system, with much of it ending up supporting stocks.
However, concerns about inflation in the wake of higher commodity and energy costs, less loose Chinese monetary policy to rein in price rises and cool a booming property market and Europe's continuing debt crisis have meant that 2010 has not been all plain-sailing, and a number of markets are ending the year down, including China's Shanghai index and most likely France's CAC-40.
Earlier in Asia, China's Shanghai Composite Index closed up 48.50 points, or 1.8 percent, to finish the year at 2,808.08. That means that the Shanghai index has ended the year about 14 percent lower.
Investors in China have got increasingly worried in the last few months that the monetary authorities will have to take more aggressive action to cool the overheating economy and keep a lid on surging inflation. Last weekend's surprise interest rate hike, the second since October, provided further evidence that 2011 will not be as easy as recent years.
Hong Kong's Hang Seng index rose 36.11 points, or 0.2 percent, to end the year 7 percent higher at 23,035.45.
South Korea's Kospi ended the year on Thursday about 22 percent higher then at the start of 2010.
The most valuable stock market in Asia, Japan's benchmark Nikkei 225 stock average, ended the year Thursday 3 percent lower at 10,228.92, as investors worry about the impact on exporters of the rising yen _ a higher yen makes it more difficult for the country's exporters to compete in international markets.
By late morning London time, the dollar was down a further 0.3 percent at 81.29 yen, its lowest level since November 9. The dollar was worth around 93 yen at the start of the year.
Analysts believe that if the yen continues to strengthen, then Japan's monetary authorities may decide to intervene in the markets by buying dollars and selling yen. In September, that's exactly what the Bank of Japan did for the first time in six years.
The yen often benefits at the end of a year as Japanese companies repatriate assets back home for financing reasons.
Meanwhile, the euro was up a further 0.7 percent at $1.3379 as it continued to end the year on a buoyant note. By the middle of the year, the euro had fallen to a four-year low of $1.1878 in June, and way down on the $1.45 level it started the year at.
It's been an extremely volatile year for the euro as it faced its biggest crisis since it was established in 1999 as huge debts in a number of countries came to the fore of investor concerns.
Greece and Ireland have both been bailed out by their partners in the European Union and the International Monetary Fund and the fear is that others may need to be rescued too. Portugal and much bigger Spain are the two considered to be the most at risk.
The prevailing view in the markets is that Europe may be able to support Portugal but that a bailout of Spain would test the limits of the existing bailout fund, potentially putting the euro project itself in jeopardy if governments don't put up more cash. Spain accounts for around 10 percent of the eurozone economy, compared with the Greece, Ireland and Portugal, which account for around 2 percent each.
____
AP Business Writer Kelvin Chan in Hong Kong contributed to this report.


Updated : 2021-04-12 00:54 GMT+08:00