Stock markets end 2013 at record highs

Major stock markets are ended the year at record highs, benefiting from record low interest rates in the US and Europe and a benign outlook for inflation.

The FTSE All World Index advanced 0.15 per cent to 268.69, a record close. It is up nearly 20 per cent for the year – its biggest annual advance since 2009.

Government bond prices, meanwhile, dropped and yields rose as investors sought higher returns on riskier assets. Gold also suffered heavy losses, recording the biggest falls for three decades.

On Wall Street, benchmark indices were trading at fresh record levels in the final session of 2013. The S&P 500 gained 0.4 per cent to 1,848.36 points, up almost 30 per cent this year. The Dow Jones Industrial Average rose 0.4 per cent to 16,576.73, an annual climb of 26 per cent.

In Europe, the FTSE Eurofirst wrapped up the year with an annual gain of 16 per cent, with Germany’s Xetra Dax finishing 26 per cent higher, making it the best performer of the major European markets. London’s FTSE 100 closed up 0.3 per cent at 6,749.09, taking its gains for last year to 14.4 per cent.Irish stocks rose 33 per cent in the year the country emerged from its bailout.

In Asia, Japanese stocks were the standout gainers, helped by Shinzõ Abe’s first year in power and his drive to combat decades of deflation with a monetary stimulus programme leading to a rapid fall in the value of the yen which helped the country’s dominant exporters.

Chinese stocks had tougher time, however, as reforms hit some of the country’s biggest sectors. The Shanghai Composite was down 7 per cent on the year. Hong Kong’s Hang Seng index inched up only 2.9 per cent in 2013.

Among the major currencies, the euro gained on the dollar. The single currency traded at the last session of the year at $1.3779, up 4.1 per cent on the year.

Gold has been the standout mover on commodity markets after investors moved into higher yielding, riskier assets. The precious metal recorded its biggest annual fall since 1981. It ended the year down almost 30 per cent at $1,208.56 an ounce. – (Copyright The Financial Times Limited 2014)