Europe close: Shares close lower but Stoxx gains 22% over 2021

by | Dec 31, 2021

European shares finished 2021 in muted fashion, closing lower in thin volumes as traders and investors pondered a new year in the shadow of surging Omicron Covid cases.
The pan-European STOXX 600 closed 0.13% lower. Trade was predictably thin with investors and traders alike still off on the holiday break and bourses across the continent were either shut or open for a half day.

Despite the subdued mood, the European benchmark index was set to close the year 22.3% higher and has risen 82% from lows hit in March 2020 at the peak of the pandemic, driven by record growth in corporate profits, supportive monetary policy and vaccinations.

“Indices generally have struggled for direction as the year winds down, but will benefit from Chinese PMIs and the monthly US job numbers next week, providing some clues on the health of the global economy. Santa did indeed arrive for markets over the festive period, with equities rallying in the week between Christmas and New Year,” said IG analyst Chris Beauchamp.

“As we look ahead into 2022, the questions around inflation, growth and the return of the pandemic remain with us, while the monetary policy outlook is clouded by the potential for more rate hikes throughout the coming months. Overall it still seems sensible to expect further gains for stocks, but with perhaps less of the exuberance we saw in 2021.”

Reflecting the downbeat tone, travel stocks, which had been hoping for a winter season bounce, were all lower as flights were cancelled due to lower demand and renewed restrictions.

Cruise line operator Carnival, travel concession chain WH Smith and budget airline Ryanair were all lower.

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