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Asian equities rallied while European and US stock futures fluctuated on the final trading day of a rough year for financial markets, with stocks and bonds posting their worst annual gains in more than a decade.
Stock benchmarks in Japan, Australia and China strengthened as S&P 500 contracts faltered, shading the best day this month for the index on Thursday, when it jumped 1.7%. The dollar rebounded from the previous session’s decline, with Treasury yields rising and the yen rising as the Bank of Japan announced a third day of unplanned bond buying.
Uncertain direction is undermining hopes for a strong rally in late 2022, a year in which inflation has reasserted itself, wiping out a fifth of global equities in the worst performance since the financial crisis. Few regions have escaped the effects of Asian equities falling more than 19% this year. Bonds lost 16% in value, the biggest drop for a single leading measure since at least 1990, as central banks sought to slow consumer price growth by raising interest rates around the world.
Nasdaq 100 futures also fell sharply after the benchmark index jumped 2.5% on Thursday. The index has lost a third of its value this year as tech stocks have been among the most vulnerable to rising rates.
Concerns about the global implications of a rise in Covid-19 cases in China eased in part when Italy said it had found no new strains of the virus in recent arrivals from China. Italy and the US this week introduced testing requirements for air passengers arriving from China as a wave of infection swept through the world’s most populous country.
At the same time, oil rose after a three-day decline due to concerns about increased inventories of raw materials and a possible decrease in demand from China, as a major importer.
Analysts are cautious about predictions, waiting for the next year to begin. Central banks fight against inflation and the resumption of trade in China are among the main benchmarks.
