By Eddie van der Walt and Ksenia Galouchko
(Bloomberg) -- Global stocks were set to close a tumultuous year with the biggest gain since 2013, even as European and Japanese equities angled for their first annual decline in five years. The euro spiked higher as the dollar rally continued to fizzle.
The MSCI All-Country World Index was little changed, though set for 5.8 percent advance for the year. Japan’s benchmark Topix index and the Stoxx Europe 600 index were set for the first yearly decline since 2011. A gauge of the dollar shifted lower after reaching the highest level in more than a decade earlier this week.
The year for financial assets started on a sour note from the first day of trading, with the MSCI World gauge tumbling 2 percent. China-fueled turmoil sent stock markets from Tokyo to India into bear markets in the first two months of 2016. Oil reached a 13-year low while the dollar slid to its weakest level in a year. The second half of the year surprised many analysts, as financial markets powered past the Brexit shock while Donald Trump’s presidential victory provided an unexpected boost.
“2016 was perhaps one of the biggest roller-coasters driven by political events,” said Dmitri Petrov, a strategist at Nomura International Plc in London. “It’s not so much the actual realized volatility of asset markets, but volatility of market view around the global macro and policy outlook that made it exceptional.”
Stocks
- The S&P 500 rose 0.2 percent to 2,252.89 at 9:31 a.m. in New York. Financial shares contributed most to the annual gain, with a 19 percent rally. Energy producers jumped 24 percent in 2016, while health-care stocks lost 4 percent for the worst performance.
- The Dow Jones Industrial Average rallied 14 percent this year, led by gains of at least 30 percent in Caterpillar Inc., UnitedHealth Group Inc. and Goldman Sachs Group Inc. Nike Inc.’s 18 percent slump made it the dog of the index.
- The Stoxx Europe 600 Index rose 0.2 percent, paring its annual drop to 1.2 percent, the first retreat since 2011.
- Canada’s S&P/TSX Composite Index has rallied 19 percent in the year for the best performance among 24 developed-nation stock gauges tracked by Bloomberg. Materials and energy producers that make up one-third of the measure have jumped at least 32 percent.
- The U.K.’s FTSE 100 Index looked to end the year at an all-time high thanks to a slumping pound that boosted its exporters and a rally in commodity producers.
- Emerging-market stocks rose for a fifth day, padding an 8 percent advance that is the best since 2012.
- The MSCI Asia Pacific Index was little changed, up 2.1 percent for the year, its first annual gain since 2013.
Currencies
- The euro rallied as much as 1.6 percent before paring its advance to 0.5 percent and trading at $1.0539. It ended 2015 at $1.0862.
- The yen fell 0.4 percent to 117 per dollar, erasing an earlier advance of 0.4 percent. The currency was up more than 20 percent for the year in August, but has pared that to 2.7 percent.
- The Bloomberg Dollar Spot Index slipped 0.3 percent after dropping 0.5 percent Thursday, although it remains up 2.8 percent for the year.
- Sterling was on track for a more than 16 percent drop against the dollar this year and was the worst performing Group-of-10 currency in 2016 despite the recent stabilization.
Commodities
- Crude futures slipped 0.5 percent to $53.49 a barrel, after Thursday’s 0.5 percent decline. Prices are up about 45 percent this year. Supply cuts from OPEC and other producing nations next month are intended to stabilize the market and reduce swelling global inventories.
- Gold was little changed at $1,157 an ounce after rising four days. The metal is up more than 9 percent for the year.
Bonds
- The yield on 10-year Treasury notes was little changed at 2.48 percent after dropping three basis points Thursday. It slid to 2.46 percent earlier in the week, the lowest since Dec. 14.
--With assistance from Chikako Mogi, Daisuke Sakai, Manish Modi, Heejin Kim and Benjamin Purvis. To contact the reporters on this story: Eddie van der Walt in London at [email protected] ;Ksenia Galouchko in Moscow at [email protected] To contact the editors responsible for this story: Jeff Sutherland at [email protected] Ravil Shirodkar, Tim Barwell