European stock markets climbed to all-time highs in the first trading session of 2022, with oil prices and US stock futures also rallying after last year’s strong rally.
The Stoxx 600 index across the region was up 0.7% in afternoon trades, with Germany’s Dax up 0.9% and Paris’ Cac 40 up 1.2%. In Asia, South Korea’s Kospi rose 0.4 percent. Exchanges in London, Japan and mainland China were closed for the holidays.
Monday’s increase comes after the Stoxx 600 ended 2021 with a 22% gain, a sharp rebound from a 4% drop the year before, as the coronavirus crisis rocked global markets. . A round of government and central bank stimulus, combined with the global economic recovery from the depths of the pandemic, has helped fuel the rally, analysts and investors said.
Gains in European markets accelerated on Monday, with German airline Lufthansa, French aircraft maker Airbus and Telecom Italia all posting gains of more than 2%. Meanwhile, oil prices rose on both sides of the Atlantic. Brent crude, the international benchmark, rose 0.5% to $78.20 a barrel, while U.S. West Texas Intermediate crude rose 0.3% to $75.45. Both are up about 50% last year after plummeting in 2020.
Even as stocks continue to rally into early 2022, investors have started the year with some risk Karl Steiner, strategist at Swedish bank SEB, said. Evergrande’s announcement on monday Steiner added that it will again suspend its shares in Hong Kong.
The real estate developer was in the heart of industry-wide crisis in the world’s largest emerging markets for months. Hong Kong’s Hang Seng share index fell 0.5% on Monday, with the property development sector falling 1.1%.
Rising tensions between the West and Russia have also caught investors’ attention, with US President Joe Biden warning that his country will Decisive action” Should Russia invade Ukraine?
The spread of the highly transmissible strain of the coronavirus Omicron, rising global inflation and the removal of central bank stimulus measures are other factors that are showing big signs.
In the US, futures that track the S&P 500 index rose 0.6 percent in early Chicago trade. The Wall Street benchmark is up 27% in 2021, marking the third consecutive year of double-digit gains.
Global government bonds are under mild selling pressure. German 10-year US yields rose 0.01 percentage points to minus 0.17 percent, while the US equivalent edged up 0.03 percentage points to 1.53 percent.
A survey of the US manufacturing sector, due out on Tuesday, along with the monthly jobs report on Friday, could provide further direction in the first trading week of the year.
