Mon. Jan 17th, 2022

European stock markets climbed to a new all-time high in the first trading session of 2022, with oil prices and US stock futures also rising after last year’s strong upswing.

The regional Stoxx 600 index rose 0.6 percent in morning trades, with Germany’s Dax and France’s Cac 40 each up 0.9 percent. In Asia, South Korea’s Kospi climbed 0.4 percent. Scholarships in London, Japan and mainland China were closed for holidays.

Monday’s rise came after the Stoxx 600 closed 2021 with a gain of 22 percent, a strong recovery from the decline of 4 percent the previous year, when the coronavirus crisis shook world markets. A flood of stimulus from the government and central banks, combined with the global economic recovery from the depths of the pandemic, helped fuel the rise, analysts and investors said.

Profits in Europe’s markets were huge on Monday, with German airline Lufthansa, French aircraft maker Airbus and Telecom Italia all gaining more than 2 percent. Oil prices, meanwhile, have risen on both sides of the Atlantic. Brent crude, the international benchmark, rose 1.1 percent to $ 78.60 a barrel, while U.S. brand West Texas Intermediate rose 1.1 percent to $ 76.01. Both rose about 50 percent last year after sharp declines in 2020.

Even as equities continued to rise at the beginning of 2022, investors began the year various risks bubble in the background, said Karl Steiner, a strategist at the Swedish bank BEE. Evergrande’s notice on Monday that he would suspend his shares in Hong Kong again “injected a bit of uncertainty,” Steiner said.

The controversial real estate developer was in the middle of a sector-wide crisis months in the world’s largest emerging markets. Hong Kong’s Hang Seng stock index fell 0.5 percent on Monday, with the real estate development sector down 1.1 percent.

Rising tensions between Western countries and Russia have also attracted investors’ attention, with US President Joe Biden warning that his country act “decisively” would Russia invade Ukraine.

The proliferation of the highly transmissible Omicron strain of coronavirus, increased global inflation and the removal of central banking stimulus measures are all other threatening factors.

In the US, futures contracts following the S&P 500 rose 0.4 percent in early Chicago trading. The Wall Street rating rose 27 percent in 2021, the third consecutive year of double-digit gains.

Global government bonds have come under slight selling pressure. Germany’s 10-year Bund yield rose by 0.03 percentage points to minus 0.15 percent, while the US equivalent rose by 0.01 percentage points to 1.51 percent.

A key survey of the U.S. manufacturing sector, which will be published on Tuesday, along with the accurate monthly work report on Friday, could provide further direction in the first trading week of the year.

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