The UK’s Blue-Chip FTSE 100 suffered its worst year since the 2008 financial crisis in 2020. On the last day of the year, it closed 1.5% lower at 6,460, down 14.3% for the year. Stocks were hit by the Covid-19 pandemic lockdowns and Brexit uncertainty. Other than in Spain, Britain’s top stocks were the poorest performer among the largest global stock indices.
The FTSE 100, known as the Footsie, started the year at 7,542 points and closed on New Year’s Eve at 6,460 points, a loss of 14.3%
The FTSE 100 is dominated by travel, leisure, general retail, energy and banks, all companies which struggled to recover the massive losses suffered during the March crash when the virus forced Europe into lockdowns. Additionally Brexit uncertainty continued throughout the year, right up until the last day of 2020.
Record increases in COVID-19 infections and new restrictive measures in England hit sentiment during the fourth quarter. The index did rebound gfrom the depths of despair aided by massive fiscal and monetary policy support globally, and more recently the EU-UK agreement on post-Brexit trade and the roll-out of COVID-19 vaccines.
Components that lost the most in 2020 in the index included the parent company of British Airways, IAG which crumbled 61% and jet engine manufacturer Rolls-Royce fell 52%. Oil companies BP and Royal Dutch Shell were both down over 40% during 2020. The worst hit banks were Lloyds Banking Group down 41% over the last 12 months and NatWest down 30%.
Scottish Mortgage Investment Trust, which invests in technology companies including Tesla, Amazon and Tencent, was the best-performing FTSE 100 stock more than doubling in value during 2020. Online grocery business Ocado was next best up 78% for the year.
How European and UK Largest Caps Fared in 2021
How Global Indices fared in 2020
- In the U.S. the S&P 500 and Dow closed at record levels at the year end.
- The tech heavy Nasdaq led the charge in 2020 up 43.64%, the largest gain since 2009
- S&P was up 16.26%. Since 2010 the S&P is up 240%, though 57% of the gain in the S&P was from just three stocks Microsoft, Amazon and Apple
- The Dow is closed up 7.25% after being down most tof the year, the DJIA was down over -36% at the March low
- In Europe the best performer was the German DAX which rose +3.6% for the year.
- Spain’s IBEX 30 was an even worse performer than the FTSE 100 down -15.5%.
- Italy’s MIB fell -5.4%,
- The French CAC 40 fell -7.1%
- The British FTSE 100 dumped. -14.3%
- The Australian ASX 200 Stock Market Closed Down 1.5% in 2020
- Japan’s Nikkei gained 16%,
- China’s Shanghai composite rose ripped 14% during 2020.
The pound however rallied to its highest level against the US dollar in more than two and a half years as massive US QE weakened the dollar and relief that the UK-EU free trade deal had been agreed boosted the pound. The stronger pound also offset losses for overseas investors in the UK stock market.
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