European markets kick off the New Year on a high note.
European market prices started this New Year on a high note on Monday (2 January) after a turbulent 2022, which saw International Monetary Fund (IMF) chief Kristalina Georgieva warning that three-quarters of the global economy is in danger of recession by 2023.
The Paris CAC 40 climbed over 1% as did the Frankfurt DAX increased by 0.7 percent. However, London, Wall Street and oil markets were shut to celebrate the holidays.
The majority of Asian stock markets were closed. The ones that did open, Jakarta was flat while Seoul dropped and Mumbai increased.
Wall Street recorded its worst annual decline since 2008 last year, while Hong Kong had its biggest fall since 2011. Tokyo witnessed its first annual drop since 2018.
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Paris and Frankfurt also saw their biggest annual declines since 2018, and London was able to stay ahead of the curve as it ended the year nearly 1 percent higher than the year.
European markets start New Year on high notehttps://t.co/5ki1Uq5uHr
— ABS-CBN News (@ABSCBNNews) January 2, 2023
Investors were hammered last year by the Russian invasion of Ukraine in February of last year, inflation soaring and increasing rates.
Inflation is fueled by rising food and energy prices, however the European price of gas, which climbed to a new record EUR345 per megawatt hour in March, dropped more than 4 percent on Monday, to EUR73 which was the lowest price since the beginning of the war.
The recent COVID epidemic in China where the authorities have relaxed restrictions following a wave of protests – presents fresh issues for the global economy.
The director of the International Monetary Fund, Kristalina Georgieva, claimed in an interview on US TV that aired on Sunday that the year 2023 will prove to be “tougher than the year we leave behind” for the global economy.
“Why? Because the three biggest economies, US, EU, China, are all slowing at the same time,” she told CBS’s “Face the Nation” show.
“We expect one third of the world economy to be in recession,” Georgieva stated.
While there is a chance that the United States may avoid it however, she predicted that 50% of the European Union will be in recession by 2023 because the bloc has been “very severely hit” by the Ukraine conflict.
The Chinese economy has slowed “dramatically” due to its zero-Covid policy in 2022 will likely to be less than global growth at the beginning of the past 40 years.