Market Report: Hopes of a last-chance 2014 rally dashed

Any hopes of a last-chance 2014 rally came and went by lunchtime as the half-day final trades of the year played out.

The FTSE 100 closed up 19.09 points to 6,566.09 on the day, but it was not enough to stop the first yearly fall of the blue-chip index since 2011, as the commodity-heavy index was hit by the slowing world economy – highlighted again by China’s manufacturing sector shrinking for the first time in seven months in December. This left oil at $56 a barrel, prompting Tesco, Sainsbury’s, Asda and Morrison’s to knock 2p off a litre of petrol.

But while it was good news for motorists, it was a bad day for oil and mining firms. Anglo American closed down 3p at 1,200.5p; BHP Billiton fell 1.5p to 1,388.5p; Glencore was down 1.2p at 298.8p; and Tullow Oil 1.5p at 413.9p.

The market was helped up by growth in financial and consumer stocks, with Kingfisher up 8.1p at 334p and Aberdeen Asset Management up 5.9p at 431.25p; Next continued its growth from Tuesday, up 95p to 6,737.5p.

The FTSE 100’s biggest riser of 2014, the newly merged Dixons Carphone, was also up 6.6p at 462.4p on the day and a staggering 68 per cent on the year.

But despite the FTSE closing the day up, traders will want to put 2014 behind them and hope for a clearer 2015. Even European and US markets, with their problems, managed to close the year up.

Even the annual Santa Rally failed to materialise on the FTSE and the index fell in December for the first time in 12 years.

If there is any silver lining, the market did recover 6 per cent from its lowest point in October, when the Ebola outbreak peaked and Germany’s euro power looked weakened.

In a difficult year for the market, traders will no doubt be hoping for a different 2015, where they will be looking for clarity in several areas, including the Bank of England base rate, Greece’s snap election and the eurozone ramifications.

Closer to home the supermarket price wars are still raging and some analysts are predicting the demise of either Sainsbury’s or Morrisons.