FTSE 100 ends 2015 among world’s worst performing markets

London investors miss out on returns enjoyed by rival stock markets in Frankfurt, Paris, Tokyo and Shanghai

City investors are nursing losses after the FTSE 100 ended the year as one of the worst performers among global stock markets.

Britain’s biggest share index shed almost 5% during a volatile 12 months dominated by the commodities crunch and fears over China’s slowing economy.

Related: FTSE 100 index posts 5% loss for 2015 – business live

Related: The UK economy in 2016: a flying start but watch the brakes

Continue reading…

FTSE 100 index posts 5% loss for 2015 – business live

Rolling coverage of the final trading day of the year, as Britain’s blue-chip index ends 2015 in the red

The US stock market is expected to follow London’s lead, when it opens in an hour’s time:

U.S. futures indicate lower open for the last trading session of 2015. https://t.co/TYyASCwzoa pic.twitter.com/HmsxcMmpA7

London’s stock market has closed for 2015, after a less than stellar performance.

The FTSE 100 lost 31 points today, or 0.5%, to finish at 6,242. That means the blue-chip index has lost almost 5% of its value since the start of this year.

“We don’t see a vast amount of movement in the FTSE 100 this year.”

The oil price is dipping into the red, knocking almost 1% off the price of a barrel of US crude.


We’ve pulled together a map showing where today’s oil rig evacuations took place:

Reuters data whizz Vincent Flasseur has pulled together some handy charts, showing the scale of the rout in commodity prices this year:

News from the North Sea: The barge that was threatening to hit BP’s oil platform in Valhall has missed the installation.

It’s not clear how soon BP staff will be returned to the site after being evacuated this morning, or whether other platforms are still at risk, though.

Back in London, the stock market is shuffling its way towards the new year.

After a year that began so promisingly the markets are wrapping up 2015 in the limpest way possible, a collective sigh instead of any attempt at New Year’s Eve fireworks.

The stormy weather in the North Sea has claimed one life already this week.

A rig operated by energy company Statoil was hit by a “heavy wave” yesterday, killing one worker and injuring two more.

Oil giant BP is scrambling to evacuate staff from a platform in the North Sea, because a barge is drifting in the area.

“The barge has changed direction and BP has decided to shut production [at Valhall] and there will be a total de-manning of the platform. There are 71 people left on the platform and they are being evacuated as we speak.”

Related: BP evacuates North Sea oilfield as unmanned barge threatens oil rig

Tomorrow could be another red-letter day for Puerto Rico, and those investors who have loaned money to the US territory.

Puerto Rico is expected to default on $37m of debt obligations, as its ongoing financial crisis worsens. It has already defaulted once, in August, sparking suggestions that Puerto Rico is America’s Greece.

Related: Puerto Rico will default on $37m in debt on New Year’s Day, governor confirms

The slump in the rouble will hurt Russian families by pushing up the cost of imported goods, and make an overseas trip even pricier.

Some analysts say the rouble is still overvalued, and the current oil price should theoretically push the rouble down further. This is necessary to balance the budget: the fewer dollars Russia receives for the oil it sells, the higher the exchange rate needs to be for the budget to receive the requisite amount of roubles. For the budget to balance at 65 roubles, not far off the current rate, the price of oil should be $70, a recent Bank of America Merrill Lynch report found.

For ordinary Russians, it could be a tough year ahead. Those who were used to travelling abroad have already had to scale back as the rouble made the cost of visiting foreign cities prohibitive; and rising food prices have made it harder to balance the books for many families.

Related: Recession, retrenchment, revolution? Impact of low crude prices on oil powers

An underwhelming start to trading in London has send the FTSE 100 down by 17 points, or 0.3%, to 6257.

A continued slide in the oil price and a US Dollar that’s not going down without a fight are dominating sentiment as people begin to attempt their 2016 forecasts, seeing headwinds for long term earnings.

Sports Direct’s New Year pay pledge is worth around 15p per hour to around 15,000 workers at its stores (many on zero hours contracts) and some 4,000 agency staff at its depot.

Retail analyst Nick Bubb says it could improve the company’s public image, at a price….

Mike Ashley’s New Year resolution to be a better employer will go some way to improve Sports Direct’s battered PR image, but it will knock c£10m off the profit base…

Sports Direct’s pledge to raise staff wages isn’t enough, say campaigners:

Alex Flynn, head of media and campaigns at the Unite union, told the Guardian he was “massively underwhelmed” by the news from Sports Direct.

“Mike Ashley, if he’s serious about Sports Direct being one of the best retailers in terms of how it treats its staff on the high street, it’s got a massive way to go.”

Three weeks ago, the Guardian exposed work practices at Sports Direct’s warehouses – including that staff are effectively being paid under the minimum wage due to lengthy security checks.

And now, the retailer has announced a £10m plan to raise wages over the legal minimum.

“I realise this is ambitious and it won’t be easy, but I believe as a FTSE 100 or even 250 company we have a responsibility to set a high moral standard.”

Related: Sports Direct’s Mike Ashley promises £10m to pay all staff above minimum wage

2015 really has been a rough year for commodities.

Copper has shed around 25% of its value this year,

Oil: down 35%

”Slowing economic growth and structural reforms in China might contribute to decreased demand for commodities.”

A quick glance at the oil price shows exactly why the rouble is so weak.

Brent crude began 2015 at around $58 per barrel, and climbed up to $68 by April. But it has since slumped to below $37, a loss of around 35%.

Related: Asian markets subdued as oil slump looks set to continue into 2016

Brent crude below $50 per barrel is too low for the industry to make the investments needed to meet growing global demand. Providing the world economy does not skid into recession, this looks like being the year that the oil price heads back to more sustainable levels.

Forecasting the world in 2016 – our pundits take a punt – https://t.co/g2Eud9fepF https://t.co/DvEUpwxiCa via @FT

The Russian rouble could suffer further losses in 2016, unless the oil price bounces back soon.

Alexey Korolenko, a money manager at UralSib Asset Management in Moscow, warns:

“The ruble may weaken further.”

“It’s hard to expect stronger oil right now. It should rise to $45-$50 per barrel, maybe, by the end of 2016. Reduction of investments should eventually make impact, the question is what the lag will be.”

Over in Moscow, it’s a bracing minus 9 degrees Celsius on the final day of the year.

“We’re getting a big drop in oil attributable to the rise in inventories and that is spilling over into commodity currencies.”

Good morning, and welcome to our final business live blog of 2015, covering events across the financial markets, the world economy, business and finance.

And what a year it’s been. We’ve not been short of drama – with the Greek debt crisis dominating the first nine months of the year.

Our European opening calls: $FTSE 6257 down 17 $DAX 10709 Closed $CAC 4676 down 1 $IBEX 9605 down 37 $MIB Closed

Concerns about traders coming back from holidays in January and aggressively selling off the market may have driven a number of investors to take some of the profits off the table after the good run we have seen over the holiday period.

Continue reading…

The UK economy in 2016: a flying start but watch the brakes

Cheap credit and petrol have got Britain motoring but the Bank of England must hit the controls at the right time

The UK ends 2015 as one of the fastest growing of the major developed economies. Unemployment is falling, the housing market is hot and consumers are happy to spend money in the shops or online. For at least the first half of 2016 it will be a case of more of the same. The reason is simple. The UK economy has plenty of momentum thanks to almost seven years of zero interest rates, rising living standards and government incentives to buy property. Even if there was a sudden nasty shock, it would take time for the effects to show up.

As it happens, recent developments have been positive for growth. The fact that motorists can find petrol for less than a pound a litre reflects the tumbling price of oil on the global commodity markets. That will cut business costs and raise corporate profits while at the same time cutting domestic heating bills and the cost of travel.

Continue reading…

What will happen in 2016?

Space explorers, genetic scientists, US voters, terrorists and hackers look set to dominate our world next year – but don’t rule out the odd pleasant surprise

Never make predictions, especially about the future. So said Mark Twain, Yogi Berra or Niels Bohr – or possibly all three.

But if you must, there are really only two options: play safe and go for the obvious, or come up with forecasts so giddily optimistic that no one will take you seriously.

Related: OECD fears slowdown in global trade amid China woes

Continue reading…

IMF chief Lagarde warns of disappointing global growth in 2016

Economic outlook has deteriorated, with rising US interest rates and Chinese downturn increasing risk of instability

Global economic growth will be disappointing next year and the outlook for the medium-term has also deteriorated, the head of the International Monetary Fund has warned.

The IMF managing director, Christine Lagarde, said the prospect of rising interest rates in the US and an economic slowdown in China were feeding uncertainty and a higher risk of economic vulnerability worldwide.

Related: IMF chief Lagarde warns of disappointing global growth in 2016 – as it happened

Continue reading…

2015 newsmaker: Murphy’s law – meet the man behind Corbynomics

Tax expert Richard Murphy, widely credited with inspiring Labour’s economic policy, explains why he’s not suited to being behind the scenes

“It was amazing how quickly the cold shoulder came on.” Richard Murphy, tax expert and father of Corbynomics, has heard nothing lately from Labour’s shadow chancellor and Jeremy Corbyn’s right-hand man, John McDonnell.

Back in the summer, when he was propelled into the political limelight by the Corbyn leadership campaign, which was keen to show it had a coherent economic platform, Murphy began to assume he would take a senior role in Labour’s shadow Treasury team.

Related: Can Corbynomics guru Richard Murphy fix Britain?

Related: The Joy of Tax is no laughing matter, David Cameron | Richard Murphy

Continue reading…

Recession, retrenchment, revolution? Impact of low crude prices on oil powers

In an unprecedented year for the oil business, each of the major producers has its own problems. How will they react?

A glut of oil, the demise of Opec and weakening global demand combined to make 2015 the year of crashing oil prices. The cost of crude fell to levels not seen for 11 years – and the decline may have further to go.

There have been four sharp increases in the price of oil in the past four decades – in 1973, 1979, 1990 and 2008 – and each has led to a global recession. By that measure, a lower oil price should be positive for the world economy, with lower fuel costs for consumers and businesses in those countries that import crude outweighing the losses to producing nations.

Related: Saudi Arabia’s $640bn question

Related: Nigeria overtakes South Africa to become Africa’s largest economy

Related: Rouble in freefall despite rate hike

Continue reading…

Russia to scale back space programme as economic crisis bites

Low oil prices, western sanctions and a falling rouble have forced Moscow to rethink its ambitious plans for a Moon exploration, according to reports

Russia is revising the scale of its space programme, the national space agency has said, after a newspaper reported that the government may be forced into billions of dollars of cuts to its ambitious Moon exploration plans.

Several Russian government ministries were engaged in revising the space programme up to 2025, the Roscosmos agency said in a written statement to Reuters.

Continue reading…