European markets post worst month since October 2020, as recovery slows – business live |

“January stormed in full of optimism that Omicron wouldn’t pack the punch Delta did and that recovery would bring revitalisation for global economies. There will be many investors who’d rather like a do-over, but markets can be unforgiving. Today’s action has been pretty subdued but broadly positive, but whilst the Dow Jones has managed to find a forward gear London’s FTSE ended the day in reverse. But casting around at today’s economic data it’s hard to pin down whether the end of the month leaves up with the glass half full or half empty.

“On one hand Germany’s inflation numbers have come down, on the other output from the Chinese manufacturing sector fell to its lowest rates in two years in January, suggesting there’s more choppy water ahead. But then if you look at the Baltic Dry Index it suggests shipping costs are finally on their way down, but according the JLR’s latest and rather disappointing update there’s still no end to the global chip shortage. In a nutshell the world is in post-covid flux and it’s also dealing with a soupçon of nerves about how the situation in the Ukraine will ultimately play out.

“Whilst Goldman Sachs has cut its US growth forecast growth stocks seemed very much back in vogue today with the Scottish Mortgage Investment Trust topping London’s blue-chip index and Baillie Gifford’s US Growth Trust making decent gains on the FTSE 250 and Tesla and Netflix joining e-commerce Pinduoduo to help push up the Nasdaq. But though the day has been full of tech cheer the month has been a difficult one for the tech heavy index and it’s still down more than 10% since the start of the month, whilst the FTSE 100 has managed to emerge slightly up on where the year started.

“February will undoubtedly bring its own tribulations beginning with the Bank of England’s latest rate rise decision. Investors are confident another hike is on the cards but there is also that little seed of doubt until the decision drops. Certainly, the pressure to do something to help cash strapped consumers will weigh heavily but there is a time lag and relief won’t be instant. “