Stock markets test investor nerves in roller coaster ride

All I want for Christmas is some calm

New York (AFP) - European equities gained and Wall Street couldn’t make up its mind Friday as stock markets zig-zagged towards the year-end finishing line with dizzying volatility.

Led by the US market’s roller coaster ride, equity trading during Christmas week has not been for the faint-hearted – or anyone hoping that markets could still somehow eke out gains for 2018.

“The final trading week of 2018 has been explosively volatile and wildly unpredictable,” said analyst Lukman Otunuga at FXTM.

“Global sentiment repeatedly swung from extremely bearish to bullish this week as investors tussled with concerns over slowing global growth, US-China trade developments, Brexit-related uncertainty and a partial US government shutdown.”

Frankfurt ended its final, shortened session of the year with a 1.7 percent gain, which eased some of the pain from a whopping annual loss, but even so, the Dax index still down by 18.3 percent for the year 2018.

- ‘Stonking stateside see-saw’ -

Other European stocks also closed higher, building on the previous day’s late surge on Wall Street after a New York session that analysts at Accendo described as “another stonking stateside see-saw”.

Markets were behaving like they wanted to compress a year’s worth of excitement into the space of just a few days, they said, making for “a surprisingly volatile end to the trading year”.

New York saw a choppy session, opening higher, but then bouncing back and forth between positive and negative territory. In the end the Dow and S&P 500 finished modestly lower, while the Nasdaq eked a tiny gain.

Tokyo's Nikkei index has lost more than 10 percent this year

“This rollercoaster ride is unlikely to stop anytime soon as investors continue to wear emotions on their sleeve,” said Oanda analyst Stephen Innes.

- Tokyo’s 2018 loss -

Asian indices moved with caution on Friday after days of volatility on global markets failed to boost confidence.

But Tokyo’s benchmark Nikkei index ended the year with its first annual loss since 2011, trading in negative territory throughout the day.

“It’s inevitable that selling emerges after sharp rises like yesterday’s,” said Makoto Sengoku, market analyst at Tokai Tokyo Research Centre.

Over the year, Tokyo’s bellwether index has lost more than 10 percent.

- There’s always Sao Paolo -

Star performer gold held close to its highest level for more than six months, as investors sought out the safe-haven investment.

The precious metal, which fell below $1,200 an ounce in August, is within striking distance of $1,300.

“It is shaping up to be an incredibly positive trading week for gold prices thanks to heightened geopolitical risks and dollar weakness,” added Otunuga.

Sao Paolo's performance is the envy of the equities world

Meanwhile Sao Paolo was the place to look for a glimmer of hope for shares: Brazil’s main stock market closed its final session for the year two percent higher, resulting in a gain of 11 percent for all of 2018.

“It’s quite a positive performance for Brazil,” said Andre Perfeito at the Spinelli consultancy. “An isolated case in an international context where most stock exchanges are suffering losses.”

- Key figures around 2140 GMT -

New York - Dow: DOWN 0.3 percent at 23,062.40 (close)

New York - S&P 500: DOWN 0.1 percent at 2,485.74 (close)

New York - Nasdaq: UP 0.1 percent at 6,584.52 (close)

London - FTSE 100: UP 2.3 percent at 6,733.97 (close)

Frankfurt - DAX 30: UP 1.7 percent at 10,558.96 (close)

Paris - CAC 40: UP 1.7 percent at 4,678.74 (close)

EURO STOXX 50: UP 1.7 percent at 2,986.53 (close)

Tokyo - Nikkei 225: DOWN 0.3 percent at 20,914.77 (close)

Hong Kong - Hang Seng: UP 0.1 percent at 25,504.20 (close)

Shanghai - Composite: UP 0.4 percent at 2,493.90 (close)

Euro/dollar: UP at $1.1445 from $1.1430 at 2200 GMT

Dollar/yen: DOWN at 110.16 yen from 111.01 yen

Pound/dollar: UP at $1.2697 from $1.2644

Oil - Brent Crude: UP 4 cents at $52.20 per barrel

Oil - West Texas Intermediate: UP 72 cents at $45.33 per barrel