The US stock indices declined by 1.3-1.5% during the first trading day of the new year.
In particular, the S&P 500 broad market index lost 1.48% and showed 3700.65 points. The industrial Dow Jones Industrial Average also fell by 1.25%, that was, to 30223.89 points, while NASDAQ declined by 1.47%, namely to 12698.45 points.
Stock indicators reported negative dynamics, despite investors' quite optimistic mood in anticipation of an early global economic recovery after the COVID-19 pandemic. Market participants hope that economic activity will increase this year following the massive vaccination of the population and the continuation of operation of large enterprises. However, they are well aware that with all this, the path to a complete economic recovery will be long and difficult.
The latest news about the situation with coronavirus around the world is not encouraging either. So, the number of cases in the United States broke another anti-record on Sunday. At the same time, the authorities in many European countries are extending the terms of quarantine restrictions, which aims to slow down the spread of virus.
In addition, experts have increasingly expressed their concern in recent years about the rising tension amid the results of the second round of elections to the US Senate in Georgia. The results of the vote will show whether the Republicans are able to retain control of the Senate. Many investors believe that the probability of a Republican Party victory has decreased, and there is a tense struggle for Senate seats from day to day.
Now, let's return to the indicators of the US stock markets and find out how the first trading session of 2021 ended for them.
Coca-Cola shares declined by 3.8%. RBC Capital Markets downgraded their rating from "above sector" to "on par with sector". Experts explain this by the fact that public events and consumer visits to restaurants will continue to decline due to the coronavirus pandemic, which will significantly limit the demand for Coca-Cola products.
Airline securities affected by COVID-19 also saw a decline on the first business day of the year. Thus, American Airlines shares lost 4.1%, and Delta Air Lines securities lost 3.7%.
At the same time, quotes of hotel chain operators fell under the general wave of negativity: Hilton Worldwide Holdings fell by 3.4%, followed by Marriott International by 5.4%.
The American manufacturer of electric cars Tesla, on the contrary, grew by 3.4%. Company representatives reported that they delivered a record 499,550 cars in the previous year, almost reaching the target level of 500,000 units.
In view of large-scale sale of shares, gold's price rose by 2.7% – $ 1,944.70 per troy ounce. This figure was the most significant percentage increase since April 2020.
Toward the end of trading, the pan-European Stoxx Europe 600 rose by 0.7% and partially reduced the growth observed at the beginning of the session.
Britain's FTSE 100 also surged by 1.7%. It is clear that the market was supported by the trade agreement between the UK and the EU, which was concluded at the end of last year.
An additional reason for investors' optimism was the latest data on the state of the manufacturing sector. According to current information, factories in Asia and Europe in December 2020 increased production volumes and showed an impressive increase in activity.
On another note, strong growth was reported on Asia-Pacific stock market. South Korea's Kospi Composite led the ranking of the strongest indexes, rising almost by 2.5%.
By the end of the trading session, the Shanghai Composite increased by 0.9%, despite the latest data that China's manufacturing activity in December declined amid falling demand for exports from the country.
Experts note that this information confirms the continuing fragility of China's economy. However, it also reduces concerns that the Central Bank of the People's Republic of China will soon tighten monetary policy, which will most likely choose a more cautious tactic in the current situation.
Unfortunately, Japan's Nikkei 225 significantly fell behind the rest of the leading Asia-Pacific indices. It declined by 0.7% amid yen's strengthening. Analysts believe that the statement of the Japanese Prime Minister saying that the authorities are going to declare a state of emergency in Tokyo and surrounding areas due to the rising number of COVID-19 cases is a possible reason for this decline.
