European stock markets lower on year-end profit-taking

European stock markets were lower Monday following a mixed performance across Asia as investors wind down and take profits at the end of year.  In mid-afternoon, London’s benchmark FTSE 100 index was down 0.6 percent compared with the close on Friday.  In the eurozone, Frankfurt’s DAX 30 shed 0.7 percent and the Paris CAC 40 lost 0.5 percent.

On the other side of the Atlantic, New York’s the Dow — which ended last week on a fresh record high — shed nearly 0.4 percent.  Earlier in Asia, Tokyo’s Nikkei stocks index closed down 0.8 percent as investors cashed in ahead of the New Year holidays, but the final day of trading still saw the benchmark end up 18.2 percent from a year earlier.

OANDA analyst Edward Moya described trading as “light” but said that “expectations remain in place for US stocks to continue march higher” at the start of 2020.  The US Federal Reserve “has clearly signaled they will not be tightening anytime soon, the US consumer continues to impress, and as fears of both a complete collapse with global trade talks and Brexit have abated,” he said.

Analysts attribute the successive series of US records to upbeat investor sentiment based on a lower risk of recession in the immediate future, a mellowing of US-China trade tensions, and accommodative monetary policy.  In Asia, investors will also be watching for key policy announcements in the region later this week.  North Korean leader Kim Jong Un is set to give his New Year’s speech on Wednesday, with all eyes on nuclear-armed Pyongyang’s threat of a “new way” after its end-of-year deadline for sanctions relief from the US, analysts said.

Chinese President Xi Jinping is also scheduled to give a New Year’s address.

Elsewhere, oil prices climbed on continued demand, largely unmoved by comments from OPEC last week that the cartel would discuss ending production curbs next year.

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Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya