FTSE 100 on track for 5% rise in 2024 after solid year for shares – business live

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Trading has started cautiously in Europe this morning.

The FTSE 100 index did open in the red, but has now nudged up by 2 points, or 0.03%.

France’s CAC dipped by 0.02%, while the Netherlands’ AEX crept up by 0.06%.

Germany’s DAX closed for the year yesterday, cementing a 18% gain for 2024, while Italy’s FTSE Mib recorded a 12% rise for the year.

China' CSI 300 gains 14% this year despite losses today

China’s stock market has ended the year on a weak note.

The CSI 300 index fell by 1.6% today, despite president Xi predicting China’s growth target would be hit, while stocks in Shenzhen fell by 2.5%.

For the year, though, the CSI 300 index – which measures the 300 largest stocks listed in Shanghai and Shenzhen – has risen by over 14%. Those gains were driven by China’s latest stimulus programme, which stocks surging in late September and early October:

China's CSI300 index in 2024 Photograph: LSEG

China’s 2024 GDP growth set to hit 5% target, says Xi

China’s president Xi Jinping has predicted that the country’s economy will grow by around 5% this year.

Xi’s comments, in a speech published by the official Xinhua News Agency, are a signal that the world’s second-largest economy is on track to meet its official target.

Xi also reiterated a call to adopt more proactive macroeconomic policies.

Speaking to a gathering of China’s top political advisory body to usher in the new year, he said:

“On the journey of Chinese modernization, we will not only encounter clear skies and gentle breezes, but also face high winds, choppy waters, and even dangerous storms.

We must maintain strategic resolve and pool the great strength of all Chinese people striving in unity to cut through the waves and forge ahead with courage.”

More here: Xi calls for forging ahead to build strong China

AJ Bell FTSE 100 forecast for the end of 2025: 9,000 points

2025 could bring more gains on the UK stock market, brokerage AJ Bell has predicted.

It has predicted the FTSE 100 could hit 9,000 points by the end of 2025, which would be require a roughly 10% jump next year.

Their investment director Russ Mould argues that the “prevailing gloom” means UK equities look cheap on an earnings and yield basis, adding:

“Political uncertainty should now be receding in the UK, given the Labour government’s thumping majority, and this offers a favourable comparison with Europe, where coalition administrations now seem to be falling over at a pace to match that of the Conservative Party’s enthusiastic sacking of its leaders, prime ministers and chancellors in recent years.

The jury may still be out on the new chancellor’s first Budget, but some credit should be given for at least acknowledging the fiscal deficit which faces the country, a topic barely mentioned during the US election campaign and one that is now coming home to roost in France.

US dollar has surged 6.5% this year

2024 has also been a strong year for the US dollar, whcih is on track to record strong gains against most currencies.

The dollar index, which measures the greenback against a basket of rival currencies, is up 6.5% over the last year.

It has been lifted by expectations that the US Federal Reserve will be slower to cut interest rates than rival central banks in 2025, if the incoming Trump administration’s policies – such as new tariffs on imports – are inflationary.

Trump’s election victory is expected to lead to US fiscal expansion characterised by increased spending and tax cuts.

Tony Sycamore, market analyst at IG, explains:

This, in turn, is likely to result in stronger US growth, higher inflation, and, subsequently, higher interest rates, all of which contribute to a stronger US dollar.

Furthermore, Trump’s election victory is anticipated to result in tariffs on imports from countries, including China. Mexico, Canada and the EU which will dampen growth expectations outside the US and weigh on commodity prices.

Introduction: FTSE 100 on track for 5% gain this year

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

It’s the final trading day of the year, when investors will be adding up their profits (or losses) and turning their attention to 2025.

2024 has been another year of gains in the stock markets, with record highs seen on both sides of the Atlantic. Wall Street has led the charge, helped by the boom in tech stocks which continued over the last 12 months.

Investors in the UK stock market have enjoyed gains too – the blue-chip FTSE 100 index is on track to record a 5% rise this year, broadly in line with the European average. That would be its best year since 2021, when it rose 14.3%, and follows a 0.9% rise in 2022 and a 3.8% gain in 2023.

The ‘Footsie’ is ending the year on the back foot, though, down 2% in December. Yesterday it closed at 8121 points, a fair way shy of the record high of 8,474 set in May when falling inflation and hopes of interest rate cuts were lifting stocks.

The smaller FTSE 250 index, seen as a better barometer of the UK economy, has gained around 3.6%.

That doesn’t include the income from dividends, though, which shareholders received over the year.

As AJ Bell investment director Russ Mould puts it:

“Total returns from the UK stock market in 2024 handily beat cash, bonds and inflation, but the poor comparisons with the USA remain the stick with which the FTSE 100 is constantly beaten.

Whether the NASDAQ and S&P 500 will finally run out of puff in 2025 remains a matter of debate, but value- and income-seeking contrarians could be forgiven for giving the UK a closer look, given consensus forecasts for earnings and dividend growth.

Across the channel, France’s CAC 40 has lost around 3% during a year punctuated by political drama in Paris.

But Germany’s DAX, which closed for the year yesterday, has gained almost 19% – driven by software company SAP which rose 60% in the year.

Tech stocks also drove Wall Street higher, lifting the Nasdaq by almost 30% so far this year, and the S&P 500 index by over 23%.

Tom Stevenson, investment director for personal investing at Fidelity International, explains:

“After the turbulence of 2023, we’ve seen a marked shift towards growth, driven by stabilising inflation and a more positive outlook for interest rates.”

But in December alone, equity markets have been on the back foot – seemingly worried by ructions in the bond market where yields (interest rates) have been rising amid fears of sticky inflation in 2025.

This year has not brought much of a Santa Rally, and we may not get one today either – with the futures market indicating shares may dip in London.

London’s market will close early at lunchtime, giving traders time to spruce up for New Year festivities.

The agenda

• 12.30pm GMT: London stock market closes early for New Year

• 2pm GMT: CaseShiller index of house prices for October