Rolling coverage of the final trading day of the year, as Britain’s blue-chip index ends 2015 in the red
We’ll have a story online shortly covering today’s stock market news.
But that’s all from me this year. Thanks for reading and commenting - it’s been an eventful 2015, particularly during the Greek debt crisis:
Best wishes for 2016. See you soon.... GW
Betting firm Ladbrokes has issued its odds for 2016 - it expects UK interest rates to stay at 0.5%, house prices to keep rising, and the eurozone to stay intact.
Here’s the highlights:
Any FTSE 100 investors feeling grumpy about this year’s performance should spare a thought for their counterparts in Athens.
The Greek stock market lost an eye-watering 25% of its value this year, hit by the long drawn-out bailout negotiations. Bank shares were pretty much wiped out:
Jeremy Cook, chief economist at foreign exchange firm World First, says China’s economy will drive world markets next year.
He also warns that Britain’s upcoming vote on whether to stay in the European Union could hurt sterling:
“As we move into 2016 it will be the ability of the Chinese authorities to stabilise economic growth that will shape the global outlook. China at the moment is feeling the blowback of years of investment driven growth with industries chock full of unproductive factories, a housing sector with a significant stock overhang and ensuing high debt levels in local government and corporate balance sheets.”
“Risks of another global downturn will continue to favour the US dollar as the true currency of safe haven flows. There are reasons to be optimistic in 2016 around global growth but risks from China, Eurozone and Latin America balance will still exist.”
“The build up to a UK referendum on EU membership will be a major source of instability on the British pound and the prospect of a possible ‘Brexit’ makes pricing the risk of the referendum a thankless task at the moment.”
As predicted, shares on Wall Street are dropping in early trading.
The S&P 500 index has lost 0.3%, putting it back in the red for the year.
And the Dow Jones industrial average is down 100 points, or 0.6%. That means the Dow is 2% down this year.
Dow falls 100 in open; S&P 500 back in red for 2015 https://t.co/ex3XZFFSAY pic.twitter.com/M2ma35hScE
— CNBC (@CNBC) December 31, 2015
Despite finishing the year in the red, the FTSE 100 did hit some new highs in 2015.
The Press Association has the details:
February 24 saw the London market break a record that had stood for more than 15 years as the FTSE 100 hit a new all-time high, boosted by investor optimism about the financial crisis in Greece.
Britain’s benchmark index of leading shares closed at 6958.89, which meant the FTSE 100 finally surpassed its previous intraday peak of 6950.6 set on December 30 1999, just before the dotcom bubble burst.
The index reached a series of all-time highs before hitting its peak of 7104 on April 27, boasting a total market value of 2 trillion.
But all this was to change in the summer as China’s economic woes began to unfold.
Global markets were spooked as China posted slowing gross domestic product figures of around 7% after almost a decade of double-digit growth.
Joshua Mahoney of IG suggests that the London stock market will be driven by speculation over UK interest rate rises next year:
2015 has seen the FTSE moving in an inverse manner with inflation, with falling inflation in early 2015 treated with glee by investors, yet as disinflation fears were allayed in H2, we have seen the FTSE pull back in anticipation of a more hawkish BoE stance.
Given that disinflation fears have been driven largely by the fall in oil prices, there is reason to believe that 2016 will also see sentiment largely driven by the movement of oil prices, their impact upon inflation expectations and the subsequent monetary policy stance from the BoE.
Analysts at RBS point out that the FTSE has now recorded two annual declines in a row:
FTSE 100 ends 2015 a not so merry 4.9% lower, following a 2.7% fall over 2014. pic.twitter.com/McpazxkNsd
— RBS Economics (@RBS_Economics) December 31, 2015
London’t main stock index was one of the few major benchmarks to lose ground this year (although America’s Dow Jones industrial average could follow it).
Here’s how things finished.
The US stock market is expected to follow London’s lead, when it opens in an hour’s time:
U.S. futures indicate lower open for the last trading session of 2015. https://t.co/TYyASCwzoa pic.twitter.com/HmsxcMmpA7
— CNBC Now (@CNBCnow) December 31, 2015
London’s stock market has closed for 2015, after a less than stellar performance.
The FTSE 100 lost 31 points today, or 0.5%, to finish at 6,242. That means the blue-chip index has lost almost 5% of its value since the start of this year.
More dramatically, the FTSE 100 has lost 12% of its value since hitting its record high in April.
Could there be a rally next year?
Britain’s biggest bookmaker William Hill, reckons the FTSE 100 will end 2016 close to its current level.
Spokesman Rupert Adams says:
“We don’t see a vast amount of movement in the FTSE 100 this year.”
It’s offering odds of 6/4 that the index ends 2016 between 6000 and 6499 points.
It is 5/2 to be below 6000, and 7/2 to be over 7000.
The oil price is dipping into the red, knocking almost 1% off the price of a barrel of US crude.
WTI CRUDE EXTENDS LOSS, DROPPING 27 CENTS TO $36.33/BBL: BBG
— zerohedge (@zerohedge) December 31, 2015
That won’t help the ruble very much.
We’ve pulled together a map showing where today’s oil rig evacuations took place:
Sky News’s map shows a few other oil fields too:
Reuters data whizz Vincent Flasseur has pulled together some handy charts, showing the scale of the rout in commodity prices this year:
News from the North Sea: The barge that was threatening to hit BP’s oil platform in Valhall has missed the installation.
It’s not clear how soon BP staff will be returned to the site after being evacuated this morning, or whether other platforms are still at risk, though.
Back in London, the stock market is shuffling its way towards the new year.
With just over an hour to go until the early finish, the FTSE 100 index of blue-chip shares is down 0.3% or 18 points at 6,256.
France’s CAC has lost 0.2%, while the German exchange is closed.
Unless something remarkable happens soon, the Footsie will post a loss of nearly 5% this year - after hitting a record high of 7,103 in April.
Conner Campbell of SpreadEx says global indices are staging a “limp, whimpering finish” to 2015.
After a year that began so promisingly the markets are wrapping up 2015 in the limpest way possible, a collective sigh instead of any attempt at New Year’s Eve fireworks.
The stormy weather in the North Sea has claimed one life already this week.
A rig operated by energy company Statoil was hit by a “heavy wave” yesterday, killing one worker and injuring two more.
Oil giant BP is scrambling to evacuate staff from a platform in the North Sea, because a barge is drifting in the area.
Workers at its plant at the Valhall operation are heading for land, after the unmanned vessel broke from its moorings in rough seas.
A spokesman told Reuters that:
“The barge has changed direction and BP has decided to shut production [at Valhall] and there will be a total de-manning of the platform. There are 71 people left on the platform and they are being evacuated as we speak.”
More here:
And BP isn’t the only producer taking precautions.
Norwegian TV are reporting that Conocophillips is evacuating staff from a platform at the Eldfisk field (adjacent to Valhall).
Tomorrow could be another red-letter day for Puerto Rico, and those investors who have loaned money to the US territory.
Puerto Rico is expected to default on $37m of debt obligations, as its ongoing financial crisis worsens. It has already defaulted once, in August, sparking suggestions that Puerto Rico is America’s Greece.
Puerto Rico’s national debt now totals $73bn, which the government says is unsustainable. But as it cannot legally declare bankruptcy, it is forced to cut vital services, plead for relief from creditors, and default on payments in an ad hoc manner.
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