UK’s Blue-Chip FTSE 100 recovered in 2021, its best year since 2016, after suffering its worst year since the 2008 financial crisis in 2020. On the last day of the year, it closed 0.3% lower at 7384, up 14.3% for the year. Stocks recovered from some of the Covid-19 pandemic lockdowns and Brexit uncertainty. Other than in Spain, Britain’s top stocks were the poorest performer among the largest European stock indices.
FTSE 100 closed at 7384 points on Friday, having started the year at 6460 points.
Investors appeared to shrug off concerns about inflation, supply chain disruption and coronavirus variants such as Omicron. The close was the biggest increase in five years and remaining near a recent 22-month high of 7,421,
The more domestically focused FTSE 250 index gained 14.6% over 2021 to end the year at 23,480 points, having hit a record high of 24,353 in September.
The FTSE 100 is dominated by travel, leisure, general retail, energy and banks, many of these companies recovered the massive losses suffered during 2020 when the virus forced Europe into lockdowns. Additionally, Brexit uncertainty lessened throughout the year.
Record increases in COVID-19 infections and new restrictive measures in England hit sentiment during the fourth quarter again with Omicron. The index did rebound from the depths of despair aided by massive fiscal and monetary policy support globally, and the EU-UK agreement on post-Brexit trade and the roll-out of COVID-19 vaccines.
The best-performing FTSE 100 stocks in 2021
- Ashtead Group, an industrial equipment rental company up by 73%. The companies its revenues were boosted by the global economic rebound as major building sites reopened.
- Mining company Glencore rose over 65%, lifted by rallying coal prices
- Aerospace group Meggitt rallied 58% after a takeover bid from US rival Parker Hannifin.
- Royal Mail rose 56% on strong demand for parcel deliveries.
- Specialty chemicals producer Croda rose 53% boosted by producing ingredients used in Covid-19 vaccines.
Banks and oil companies also had strong years,
Noticeably some of 2020’s “pandemic winners” fell, with Ocado falling 26%. IAG, British Airways’ parent company, downl 10% during 2021 owing to concerns that Omicron would delay a travel recovery.
The FTSE 100 lagged behind some other major European indices, France’s CAC soaring 20% and Italy’s FTSE MIB up 23%. The pan-European Stoxx 600 hit a series of record highs, lifted by technology firms and financial stocks. Luxury also did well, with LVMH Moët Hennessy Louis Vuitton’s shares firmly in fashion, up more than 40%.
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.
From The TradersCommunity News Desk