Weekly round up
The New Year has started with a volatile period for the global financial markets, however, due to the tech light nature of the FTSE 100 Index, it has managed to withstand much of the sell off, rising by 1.18% to end the week at 7,456 points at the time of writing.
Earlier in the week, the FTSE 100 traded at near two-year highs, led by strong gains in travel stocks, banks and commodity-related companies. Investors were upbeat about the economic outlook after the Prime Minister, Boris Johnson, said on Tuesday there was no need to tighten restrictions in England despite the record surge in coronavirus cases.
In other economic news, UK house prices in December were 9.8% higher than a year earlier, the sharpest annual increase since July 2007. The UK 10 year Government Bond Yield also increased to a 10-week high of 1.161%.
In the commodity markets, gold fell below $1,800 an ounce on Friday and is set for a 2% weekly decline, weighed down by firmer bond yields as traders braced for a more aggressive monetary tightening by the Federal Reserve.
Brent crude futures held above $82 per barrel and are headed for their third weekly advance as the market tightened due to a civil unrest in Kazakhstan and supply outages in Libya. Kazakhstan’s biggest oil producer has altered output at the giant Tengiz field following widespread protests in a country that is currently producing 1.6 million barrels of oil per day.
US stocks extended losses from the previous session on Thursday with the Dow Jones Industrial Average erasing more than 150 points and the Nasdaq Composite closing 0.1% lower.
The major US indices all saw significant declines this week as investors dumped shares in many of the technology companies that surged during the pandemic as the looming spectre of higher interest rates prompted them to buy into businesses more tightly linked to the economic recovery.
Federal reserve policymakers widely agreed that it might become warranted to increase interest rates sooner than they had earlier anticipated given a brighter outlook for the economy and the labour market against the backdrop of rising inflation.
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