FTSE 100 ends 2022 in the red as Wall Street opens lower

FTSE  People cross Waterloo Bridge during the evening rush-hour with skyscrapers of the City of London financial district seen behind in London, Britain, October 10, 2022.  REUTERS/Toby Melville
FTSE 100 finished the last trading session of the year in negative territory. Photo: Toby Melville/Reuters

The FTSE 100 and European stocks ended 2022 in the red after what has been a volatile year, in which global stocks have lost around a fifth of their value as the Ukraine war rocked markets.

The FTSE 100 (^FTSE) lost 0.81% to close at 7,451, while the CAC (^FCHI) in Paris slipped 0.72% to 6,526 points. In Germany, the DAX (^GDAXI) retreated 0.89% to 13,946.

For London's blue-chip index, that’s a gain of 0.9% for 2022 as a whole, during a year in which global markets fell almost 20%.

The FTSE 100 was helped by oil companies BP (BP.L) and Shell (SHEL.L), both up over 40% in 2022, and defence firm BAE Systems (BA.L), up 56% this year.

Ahead of the New Year’s celebrations this weekend, Friday was a shortened trading day with the London Stock Exchange closing at 12:30pm.

The biggest risers on the FTSE 100 were JD Sports (JD.L), up 2.44%, Coca-Cola HBC (CCH.L), up 2.25%, Fresnillo (FRES.L), up 1.85%, Scottish Mortgage Investment Trust (SMT.L), up 0.98% and Next (NXT.L), up 0.94%, and Informa (INF.L), up 4.4%.

The biggest fallers were Barratt Developments (BDEV.L), down 3.05%, Persimmon (PSN.L), down 3.03%, BT Group (BT-A.L), down 2.73%, Ocado (OCDO.L) down 2.62% and Rightmove (RMV.L), down 2.48%.

"The most important take of the year is: the era of easy money ended, and ended for good. It means that the financial markets won't look like anything we knew since the subprime crisis," said Ipek Ozkardeskaya at Swissquote Bank

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"This is the beginning of a new era, when central banks will be playing a more subdued role in the markets, with less liquidity available to fix problems ⁠— a more than necessary move that came perhaps too late, and too painfully."

On Wall Street, stocks opened lower on the final trading day of a roller-coaster year marked by aggressive interest-rate hikes to curb inflation.

The Dow Jones (^DJI) lost 0.52% to 33,220. The S&P 500 (^GSPC) retreated 0.69% % to 3,822 points and the tech-heavy Nasdaq (^IXIC) slipped 1% to 10,372.

Each major US index is headed for a loss in December. Companies in the S&P 500 took in record profits in 2022 but the index will end the year down about 20%, which would be the benchmark's biggest annual decline since 2008.

Meanwhile, Brent crude (BZ=F) was hovering around $82 per barrel with oil prices set to end a volatile 2022 with a net gain of around 8% as Russia’s war in Ukraine rattled global markets.

Victoria Scholar, head of investment at Interactive Investor, said: “Oil prices are trading higher and are on track to log their second consecutive annual gain. Brent crude hit a 14-year high of $137 a barrel in March following Russia’s invasion of Ukraine. However since the 2022 peak, oil prices have been mostly trading lower shedding almost 40% across the rest of the year. Concerns about weaker global demand and a particular slowdown from China given its aggressive covid lockdowns have pushed oil prices lower.

"This year’s dollar strength has also put pressure on oil markets. OPEC+ tried to offset this year’s price decline by agreeing to cut production by 2 million barrels per day in October. In December, the cartel held off from cutting output further as it waits to assess the impact of slowing Chinese demand and the G7’s price cap on Russian oil.

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"Heading into 2023, severe COVID outbreaks in China and fears of recessions around the world look set to keep a lid on oil demand and prices. However, OPEC+ could intervene to offset any major declines and provide a floor if oil prices fall too aggressively.”

S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the red.

In Asia, Tokyo’s Nikkei 225 (^N225) closed flat at 26,094 while the Hang Seng (^HSI) in Hong Kong climbed 0.37% to 19,814. The Shanghai Composite (000001.SS) climbed 0.5% to 3,089 points.

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