2015 will be remembered as a year of volatility in the markets with global influences being seen to have a powerful impact upon local markets.

 

January started brightly as the European Central Bank unveiled a programme of quantitative easing fuelling a period of strong economic performance which saw the FTSE 100 break through the 7,000 barrier for the first time.

However, commodity prices collapsed during the year and with growing concern about China almost £300billion was wiped off the value at its peak, and the index finished the year down 5% at just over 6,200.

‘which saw the FTSE 100 break through the 7,000 barrier for the first time’

Markets were cautious at the prospect of another coalition government but reacted positively when the Conservatives achieved a majority in May.

Then, in June 2015, the Shanghai Composite Index lost virtually one third of its value and the shockwaves hit markets around the world; a total of £3.8trillion was wiped from global stock markets when China devalued its currency.

Commodity stocks fared particularly badly and the FTSE fell for ten consecutive trading days.

Mining companies were hit hard, Anglo American and Glencore fell 76% and 73% respectively and BHP Billiton lost 48%; Brent crude hit its lowest level since 2008 at $37 a barrel due in no small part to OPEC’s refusal to curb supply.

Stocks that performed well did so on the back of strong consumer spending and low energy costs.

In December the US Federal Reserve raised interest rates and share prices in the US and elsewhere responded positively.

Despite speculation as to when, rather than if, the Bank of England will follow suit, UK interest rates have remained at a record low of 0.5 per cent since March 2009.

The year may well also be remembered as the year of the mega deal, chemical giants Dow and DuPont held £90 billion merger talks and Pfizer announced the purchase of Allergan for £106 billion – the biggest pharma deal ever.

AB InBev made a £70 billion offer for brewer SABMiller and Royal Dutch Shell made a £50 billion takeover bid for BG Group.

Deloitte estimated that £3.25 trillion worth of deals were struck and reported that the 28 main-market issues outperformed the index by more than 20%.

As is often the case the biggest winners and losers can be found among the small caps and with large oil companies in particular taking a beating there were some impressive performances to be had from the diggers and the drillers.

Pantheon Resources struck oil in Texas and gold on the markets with a 618% gain; construction group Formation Group returned an impressive 483% following a positive profits forecast.

‘with a US presidential election and the likelihood of a referendum about a potential Brexit 2016 could be pretty eventful’

Elsewhere shale and mining stocks performed well.

Peer TV and Motive TV suffered in the ratings, slumping 99% and 98% respectively.

Platinum provider Lonmin lost its shine, shedding 96% and Golden Saint Resources fell 95%.

Expert consensus currently suggests that the FTSE will remain somewhere between 5750 and 6250 next year although it can be seen that global events can have a significant impact upon markets around the world; with a US presidential election and the likelihood of a referendum about a potential Brexit 2016 could be pretty eventful.

If taking control of your finances featured in your list of resolutions, DIY Investor will be here to help – Happy New Year.





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