Market Commentary December 2020
08 January 2021
The FTSE 100 has seen its worst year since the 2008 financial crisis as it has fallen 14.3% over the year. In December the markets continued to be volatile for the main index as the Coronavirus pandemic worsened and the Brexit agreement caused uncertainty for businesses.
Throughout December it remained unclear whether there would be a Brexit agreement in place by the time the UK left the EU on 31 December, however, on 24 December an agreement was announced, reducing some of the uncertainty for businesses. Despite December being a volatile month, the FTSE 100 ended the month up 3.10%.
For the month of December the top 5 FTSE 100 rising stocks were;
- Evraz 20.66%
- Prudential 16.37%
- Smith (DS) 16.31%
- Johnson Matthey 15.78%
- Glencore 15.44%
In the first quarter of the year Evraz experienced a significant fall in share price due to the Coronavirus pandemic. Adding to this, the turmoil within Oil and Gas markets put more pressure on the mining group and the recovery from these combined forces was slower than they expected. More recently, the mining operations and Iron Ore production began to recover and the share price has seen a corresponding increase.
For the month of December the top 5 FTSE 100 falling stocks were;
- Rolls-Royce Holdings -14.70%
- International Consolidated Airlines Group SA -6.49%
- AstraZeneca -5.10%
- Land Securities Group -4.26
- Associated British Foods -4.24%
Rolls Royce share price has collapsed throughout 2020. However, in November there was slight optimism but this was short lived as the trading update in December discussed how bad a year 2020 had been for the company. Aerospace engineering is a key part of Rolls Royce’s business so with travel restricted by the Coronavirus pandemic, the company’s earnings have taken a hit.
Throughout December, Sterling continued to be relatively stable against the Dollar and the Euro as the Brexit agreement was reached.
| 31 December 2020 | 1 month | 6 months | 12 months | 24 months | 36 months | 48 months | 60 months | |
|---|---|---|---|---|---|---|---|---|
| FTSE/100 | 6,460.52 | 3.10% | 4.71% | -14.34% | -3.98% | -15.96% | -9.55% | 3.50% |
| GBP/USD | 1.3673 | 2.64% | 10.28% | 3.12% | 7.18% | 1.17% | 10.82% | -7.23% |
| GBP/EUR | 1.1192 | 0.25% | 1.38% | -5.43% | 0.62% | -0.64% | -4.61% | -17.53% |
This newsletter is intended to provide a general review of certain topics and its purpose is to inform but NOT to recommend or support any specific investment or course of action.
Figures refer to the past and past performance is not a reliable indicator of future results. You may not get back the full amount of your investment.
Sources of information as at close of business 31st December 2020:
FTSE 100: www.investing.com
Currency: www.investing.com
FTSE 100 Risers & Fallers: www.investing.thisismoney.co.uk
Inflation & Interest rates: www.bankofengland.co.uk
