Skip Header
Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

Europe close: Shares finish year higher on rate cut hopes for 2024

(Sharecast News) - European shares finished higher on the last trading day of the year as investors looked ahead to 2024 hoping interest rates would be cut sooner rather than later.

The pan-regional Stoxx 600 finished 0.20% higher at 479.02 with all major bourses up. The European benchmark gained 12.7% over the year.

Markets have been making gains since the US Federal Reserve hinted two weeks ago that it could consider interest rate cuts next year. However, policy makers at the European Central Bank (ECB) and Bank of England have made hawkish comments since then, reiterating that the fight against surging inflation is not over.

"This year was completely different than what was expected. We were expecting the US to enter recession, but the US printed around 5% growth in the Q3," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

"We were expecting the Chinese post-Covid reopening to boost the Chinese growth and fuel global inflation, but a year after the end of China's zero-Covid measures, China is suffocating due to an unexpected deflation and worsening property crisis."

"We were expecting last year's negative correlation between stocks and bonds to reverse - as recession would boost bond appetite but batter stocks. None happened."

Crude oil prices moved slightly higher after a fall in US inventories. Brent crude traded just above $77 a barrel, still well below levels of the last two years despite geopolitical tensions and production cuts by major suppliers.

"The price has whipsawed this year as expectations of sluggish demand, inventory build ups and conflicts in key locations all amalgamated into volatility. The overall theme of the year though seems to indicate that heat has come out of the price for now - but that can change at very short notice," said Hargreaves Lansdown analyst Sophie Lund-Yates.

In economic news, UK house prices fell by a higher-than-expected 1.8% year on year in December, mortgage lender Nationwide said on Friday.

Expectations were for a 1.4% fall. Prices remained flat on a monthly basis.

Reporting by Frank Prenesti for Sharecast.com

Share this article

Related Sharecast Articles

London midday: Oil and mining stocks drag UK markets lower
(Sharecast News) - Losses in the mining and oil sectors were providing a drag on London's FTSE 100 on Monday, as investors scaled back their appetite for risk in light of rising geopolitical tensions in the Middle East.
London open: Israel-Iran tensions weigh on stocks early on
(Sharecast News) - Iran's attack on Israel overnight was weighing on London's stock market on Monday morning, with the FTSE 100 dropping 0.4% to 7,960 early on.
Asia report: Most markets fall on fresh geopolitical concerns
(Sharecast News) - Asia-Pacific markets were mixed but mostly lower on Monday, against a backdrop of escalating geopolitical tensions and ahead of key economic indicators.
Europe open: Shares shrug off MEast tensions; Temenos surges 15%
(Sharecast News) - European shares opened higher on Monday despite increased tensions in the Middle East after Iran fired drones and missiles at Israel on Saturday in retaliation for what it claimed was an Israeli attack on its consulate in Syria on April 1.

Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

Award-winning online share dealing

Search, compare and select from thousands of shares.

Expert insights into investing your money

Our team of experts explore the world of share dealing.